Tesla’s Giga Shanghai Now Sources 98% of Parts Locally

Tesla has announced that its Shanghai Gigafactory has reached a parts localization rate of 98%, marking an increase from the "over 95%" figure the company had reported for several years.

What Happened

According to a press release shared during the ninth China International Import Expo (CIIE) in Shanghai, Tesla’s largest facility now sources nearly every component for its vehicles from within China. The factory works with more than 400 tier-1 suppliers, over 60 of which have been integrated into Tesla’s global supply chain. This integration means that parts developed with Chinese suppliers are increasingly being used in Teslas manufactured in other regions. For example, the Model Y L’s seat armrests and leg supports were co-developed with Chinese suppliers for local preferences and have since appeared in vehicles sold in Japan, South Korea, Australia, and the U.S.

Why It Matters

The shift to 98% localization underscores Tesla’s deep integration into the Chinese manufacturing ecosystem, which supports its status as the company’s largest factory with an annual capacity of approximately 1 million vehicles. The facility’s efficiency is evident in its output, producing a vehicle every 30-plus seconds and reusing more than 94% of its industrial waste. In the first 10 months of the year, wholesale sales from Giga Shanghai, including exports, reached 810,889 vehicles, a 21.42% increase from the previous year. This growth occurs as Tesla plans to expand other facilities, including adding a night shift at Giga Texas and constructing a second production hall at Giga Berlin to match Shanghai’s output.

The Bottom Line

Tesla’s Giga Shanghai has achieved a 98% parts localization rate, supported by a robust network of over 400 local suppliers. The factory continues to drive significant volume, with sales up more than 20% year-to-date, while Tesla expands its global manufacturing footprint.