Home / Business / Tesla could open its Shanghai Gigafactory even sooner than expected, according to a team of Wall Street analysts who just got back from China (TSLA) 

Tesla could open its Shanghai Gigafactory even sooner than expected, according to a team of Wall Street analysts who just got back from China (TSLA) 

Tesla China Beijing

“Our China team just returned from a visit of local Chinese suppliers with some fresh feedback on Tesla’s progress with its currently under-construction Gigafactory 3 in Shanghai,” the team said in a research note. “If they’re right, Tesla may be able to ramp China production faster than we have currently anticipated in our model.”

Tesla is currently targeting the early part of the fourth quarter, it said in its first quarter letter to shareholders. If that happens, the company said, “this year, we may be able to produce as many as 500,000 vehicles globally in 2019.”

“Our China team’s view of Tesla’s ability to ramp domestic production and to take commercial share in the domestic Chinese market is more bullish than the forecast implied within our earnings model,” analyst Adam Jonas said in the note.

“We have allowed for a greater level of execution risk in our assumptions, given the complexity of bringing an all new plant with all new workers and many new suppliers on line within the Chinese market,” he continued.

Still, there are plenty of worries about China’s appetite for cars in general in the face of a slowing economy and automotive sales.

In June, China reported its worst-ever monthly vehicles sales drop, Reuters reported .The decline highlighted concerns about the country’s economic slowdown as the world’s largest car market saw demand fall for the eleventh consecutive month.

Still, there’s hope for Tesla to unlock pent up demand for Chinese buyers who may be waiting for cheaper model produced domestically, as opposed to the ones currently shipped from Tesla’s American factory in California.

“We expect Tesla will be the leading luxury EV player in China,” Morgan Stanley’s China team said.

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