Tesla Inc produced its 4 millionth vehicle in China as a Model Y L rolled off the line at its Shanghai Gigafactory on Monday, reinforcing the site's position as the electric-car maker's biggest global production hub.

The Shanghai plant accounts for about half of Tesla's worldwide production capacity and serves as its primary export base. Shipments from the facility exceeded 35,000 vehicles in October, the highest monthly total in two years.

Built to Tesla's own design standards, the factory integrates stamping, welding, painting and final assembly under one roof and can turn out a car roughly every 30 seconds.

Localization has reached 95 percent, with suppliers across the Yangtze River Delta helping cut logistics and manufacturing costs.

Those efficiencies have enabled Tesla to price Shanghai-made Model 3 and Model Y vehicles below levels in other markets.

Since the first locally produced Model 3 was delivered in 2019, Tesla has reduced prices on both models by about 100,000 yuan ($14,147) while introducing redesigned versions and adding dozens of new features through over-the-air updates.

The Model Y L, a large six-seat SUV assembled in Shanghai, now sells for less than the imported Model 3 did in 2019 — a shift Tesla cites as evidence that productivity improvements are flowing through to consumers.

Tesla is also expanding in China beyond vehicle manufacturing. Its first energy-storage plant outside the US — the Shanghai Megafactory — began operations in February 2025.

The site is designed to build about 10,000 Megapack units a year, with nearly 40 gigawatt-hours of total storage capacity destined for global markets. The first shipment, sent to Australia in March, left just weeks after initial production began.

Tesla says the growth of its Shanghai operations reflects the broader development of China's EV and supply-chain ecosystem. The Shanghai plant works with more than 400 tier-1 suppliers, over 60 of which now serve its global production network.

Supplier decisions are based on "quality, total cost, technical capability maturity and long-term continuity", Tesla said, adding that country of origin "is not an exclusionary factor" as it deepens collaboration with Chinese partners.