Fact Check: 90% of Tesla's parts are made in China at the Gigafactory in Shanghai.

Claim Analysis: "90% of Tesla's parts are made in China at the Gigafactory in Shanghai"

Introduction

The claim that "90% of Tesla's parts are made in China at the Gigafactory in Shanghai" suggests a significant localization of Tesla's supply chain within China. This assertion has been reported in various sources, primarily focusing on the localization efforts of Tesla's Shanghai Gigafactory, which is a critical component of Tesla's global production strategy. However, the specifics of this claim, including the exact percentage and the context of parts being made versus sourced, require careful examination.

What We Know

1. Gigafactory Shanghai: Tesla's Gigafactory in Shanghai, known as Giga Shanghai, is Tesla's first wholly foreign-owned automotive manufacturing facility in China. Construction began in January 2019, and production started in late 2019. The factory primarily produces the Model 3 and Model Y vehicles for the Chinese market and for export 14.

2. Localization of Supply Chain: Reports indicate that Tesla has made significant strides in localizing its supply chain in China. A report from CnEVPost states that as of August 2022, over 95% of the parts for vehicles produced at Giga Shanghai are sourced from local suppliers 4. Similarly, a report from Teslarati claims that over 90% of parts for the Model 3 and Model Y are sourced locally 3.

3. Statements from Tesla Executives: Tesla executives have publicly stated that the company aims for high localization rates to reduce costs and improve efficiency. Reports from various media outlets, including ALSETTE and Torque News, echo this sentiment, noting that Tesla's localization efforts are not only beneficial for operational efficiency but also crucial for scaling production in the competitive Chinese market 57.

4. Production Capacity: Giga Shanghai is one of the largest electric vehicle manufacturing plants globally, with a production capacity exceeding 950,000 vehicles annually as of early 2024 10. This scale is significant in understanding the impact of local sourcing on Tesla's overall production capabilities.

Analysis

The claim that "90% of Tesla's parts are made in China" can be dissected into two components: the sourcing of parts and the manufacturing of parts.

• Sourcing vs. Manufacturing: While reports indicate that a high percentage of parts are sourced from local suppliers, it is crucial to differentiate between parts being sourced and parts being manufactured. The sources primarily discuss localization in terms of sourcing rather than manufacturing, which may lead to misunderstandings about the claim's accuracy.

• Source Reliability: The sources cited include both news articles and reports from Tesla executives. While outlets like Teslarati and CnEVPost are generally regarded as reliable within the electric vehicle community, they may have a pro-Tesla bias, which could influence their reporting. Wikipedia entries provide a broad overview but should be treated with caution due to their collaborative nature and potential for bias 12.

• Conflicts of Interest: Some sources, particularly those closely associated with the automotive industry or Tesla, may have inherent biases that could color their reporting. For example, articles from Tesla-focused media may emphasize positive developments while downplaying challenges or criticisms that the company faces.

• Methodological Concerns: The methodology behind the localization claims is not always clear. For instance, how "local" is defined can vary—does it include parts manufactured in China by foreign companies? Furthermore, the timeline for achieving these localization rates is often not specified, which can lead to confusion about whether these figures represent current conditions or future projections.

What Additional Information Would Be Helpful

To fully assess the validity of the claim, additional information would be beneficial, including:

• Detailed breakdowns of the types of parts sourced locally versus those manufactured in China.
• Clarification on the definitions of "local" suppliers and whether this includes foreign companies operating in China.
• Independent audits or assessments of Tesla's supply chain localization efforts to verify claims made by the company and its representatives.

Conclusion

Verdict: Partially True

The claim that "90% of Tesla's parts are made in China at the Gigafactory in Shanghai" is partially true, primarily because it conflates the sourcing of parts with their manufacturing. Evidence indicates that a high percentage of parts for Tesla's vehicles produced at Giga Shanghai are sourced from local suppliers, with reports suggesting figures over 90%. However, the claim does not clarify that this refers to sourcing rather than manufacturing, which introduces ambiguity.

Moreover, while the sources cited are generally reliable, they may carry biases that could affect the interpretation of the data. The lack of clarity regarding the definitions of "local" and the methodology behind these claims further complicates the assessment.

Readers should remain aware of these nuances and critically evaluate the information presented, recognizing that while localization efforts are significant, the specifics of the claim require careful consideration.

Sources

1. Gigafactory Shanghai - Wikipedia. Link
2. List of Tesla factories - Wikipedia. Link
3. Over 90% of Tesla China’s Model 3 and Model Y parts now sourced locally: report. Teslarati. Link
4. Tesla VP says over 95% of Giga Shanghai's parts come from local suppliers. CnEVPost. Link
5. Over 90% of Tesla Model 3 and Model Y Parts Now Sourced From China. ALSETTE. Link
6. Tesla Has Reportedly Localized 90% of Giga Shanghai's Supplies. Torque News. Link
7. Tesla Shanghai plant to have 90% of its parts supplied locally by year end. CnEVPost. Link
8. Tesla's Shanghai Gigafactory Achieves 90% Localization of Supply Chain, To Produce Half a Million Vehicles This Year. Pandaily. Link
9. Half Of All Tesla EVs Are Made In China. InsideEVs. Link