Tesla plans to expand its Shanghai operations to become the largest automotive export hub in the world, new reports say.

Chinese media sites reported on Wednesday morning that the EV maker will build a new factory near its Shanghai operations. The plan is to output a further 450,000 Model 3 and Model Y electric cars a year.

Tesla currently has capacity to make around 2,000 cars a day. It is currently making around a third of this after securing permission to allow staff to return in a “closed-loop” system working for one shift a day.

According to the reports, Tesla sent a thank you letter to the local Shanghai authorities in Lingang Special Areafor its assistance in transporting some 6,000 workers plus suppliers, and at the same time revealed its plan for the new factory.

“They fought for three consecutive days, working round the clock and non-stop to guarantee our company’s workers could return to the factory,” Tesla said in the letter according to reports.

Good news for Australia, but how soon?

It’s good news for outer markets such as Australia, where delivery estimates for new vehicles are now stretching into 2023.

Until Tesla’s Berlin factory opened in March, a large portion of Tesla’s cars made for export in Shanghai headed for Europe. It is thought this has caused delays for the introduction of the Model Y in Australia.

However, how soon Tesla could start operating a second factory is as yet unknown. Tesla famously constructed its Shanghai factory in just 10 months, commencing production in late 2019.

Workers at Giga Shanghai. Source: Tesla

In 2021, Tesla produced 484,130 cars from its Shanghai factory. The increased production capacity would bring its Tesla’s total China output to nearly 1 million vehicles a year.

Based on Tesla China’s daily output, the loss of production from Tesla’s latest shutdown in Shanghai equals some 44,000 cars.

Tesla now has four EV plants worldwide. In addition to Fremont, California and Shanghai, China, it is ramping up production in new factories in Berlin, Germany and Texas USA, which was officially opened on April 7. In 2021, Tesla’s total EV production was more than 936,000 cars.