Tesla withdraws German subsidy application Rivals like Rivian and Lucid are under pressure
The demand for electric vehicles in The Chinese market is quite strong,Tesla has decided to invest $188 million to upgrade its Shanghai factory.Reuters reported that Tesla will hire 4,000 more workers at its Shanghai plant. Tesla originally wanted the Shanghai plant to produce 500,000 vehicles a year, up from its current capacity of 450,000 Model 3 and Model Y vehicles.The decision is a sign that Tesla CEO Elon Middot and The company's chief executive Officer Elon Musk, the company's chief executive, believes that even if the Shanghai plant could produce 500,000 cars a year, it would not be able to meet demand in China and Europe.
Reuters also reported Friday thatTesla has withdrawn materials it applied for $1.3bn in state subsidies for its Berlin battery factory.Mr Musk said he thought subsidies for electric cars should all be removed. Tesla's production history suggests it no longer needs these subsidies.Over the past 12 months, Tesla had free cash flow of $2.6bn and US GAAP earnings of $3.5bn.Voluntarily withdrawing the subsidy application helps Tesla persuade the government to remove subsidies for competitors such as Rivian and Lucid.
Investors are currently focused on the negative impact of Tesla's withdrawal, but in the long run, it's a smart move that will help it become more competitive in the electric car industry. (Writer/Shuangye)
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