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After struggling to maintain its rapid sales growth in the U.S. and globally his year, Tesla might be making big moves in China that can prove key to its goal of selling millions of electric vehicles worldwide. A new report in the Chinese press shares that the firm is interested in expanding its Shanghai Gigafactory by adding a third extension to the plant that produces close to a million electric vehicles a year.

The Shanghai Gigafactory is Tesla's biggest manufacturing plant in terms of output, as it benefits from China's suitability for manufacturing and factory operations and churns out hundreds of thousands of cars to compete in the world's hottest market for electric cars.

Tesla Might Produce Sub $25,000 EV In Its Shanghai Gigafactory According To Rumors

Today's report comes courtesy of Chinese local media and it shares purported details for Tesla's Shanghai Gigafactory. According to these, the firm is interested in starting the third phase of the plant's extension, which Tesla had initially planned in 2021 but then reassigned teams for the planned expansion. Now, industry 'insiders' report that not only is the extension back on the cards, but it might also see Tesla focus on the next generation of its electric vehicles.

The details reveal that the third phase of the Shanghai expansion, which hasn't surfaced in many media reports, could be for making a new Tesla with a lower price tag. Tesla and its chief Elon Musk have set a long term objective of making a sub $25,000 electric vehicle, and according to the report, Tesla's interest has been piqued once again due to sales troubles that the firm is facing in China and the United States.

Today's report is particularly interesting as it follows fresh comments from Musk about the cheaper Tesla in an interview. Speaking to Sandy Munro, Musk outlined that he reviews production plans for a low cost and high volume production vehicle.

According to him:

We obviously are, we are working on a low cost electric vehicle that will be made in very high volume. We're, like quite far advanced in that work. Quite far advanced in that work. You know I review the production line plans for that every week. And I think the, the revolution in manufacturing that will be represented by that car will blow people's minds. It is not like any car production line that anyone has ever seen.

The thing that's most interesting about this is that it's a production system. It's a level of production technology that is far in advance of any automotive plant on Earth.

And I should point out, that we will be making the first production line will be here in the Gigafactory in Texas, in this facility.

When asked about rumors about making this car in Mexico, Musk replied that Mexico would "be the second place" since it "would take too long to complete the factory in Mexico."

Tesla's latest earnings presentation for its third quarter also mentioned a "Next Gen Platform". When read together with Musk's statements, it's likely that this refers to the low cost EV, but unfortunately, the presentation did not share any other details apart from outlining that it is continuing to make progress. Tesla's investor day held in March shared several details for this platform, claiming that it improved operator density by 44%, space time efficiency by 30%, and costs by 50%.