Photo taken on December 31, 2023 shows the Tesla Shanghai Gigafactory. More than half of the over 1.8 million electric vehicles Tesla globally delivered in 2023 came from the Shanghai plant. Photo: VCG

Several foreign automakers are pushing forward their projects and intensifying their year-end promotional activities in the vast Chinese market, aligning with national trade-in policies and accelerating their transition to electrification as they position themselves for opportunities here.

Construction of Tesla's Shanghai Megapack energy storage plant, the company's second super factory in China, is set to be completed by December, Tesla China told the Global Times on Tuesday.

Construction began on May 23, and is expected to be completed in about seven months, faster than the construction of the Tesla Gigafactory Shanghai, Tesla said.

The plant is expected to begin production in the first quarter of 2025, with an initial capacity of 10,000 energy-storage batteries known as Megapacks a year, Tesla said.

Meanwhile, Tesla's sales in China are also gaining pace, boosted by the nation's trade-in policy, the company said.

On Tuesday, Tesla China's official website introduced a promotional campaign allowing customers to enjoy a reduction of 10,000 yuan ($1,370) on the final payment for purchasing in-stock Model Y vehicles. This offer is further enhanced by a "5-year zero interest financing plan," available until January 31, 2025, along with national and local subsidies for trade-ins, allowing buyers to save at least 50,000 yuan when purchasing the electric vehicle (EV). 

The offers will enable consumers in China to purchase the Model Y at the lowest prices ever seen in the market, according to Tesla.

Mercedes-Benz's official website in China also outlines special offers for electric vehicle purchases available as of December 31. For instance, consumers purchasing an EQA SUV can receive a national trade-in subsidy of 20,000 yuan. Mercedes-Benz also offers an additional 10,000 yuan cash subsidy for certain purchases.

Foreign-invested firms have actively participated in China's consumer goods trade-in program and have benefited equally from it, the Ministry of Commerce (MOFCOM) said on December 20.

In September, passenger car sales for 10 major foreign-invested car companies increased by 15.5 percent month-on-month, while in October, sales rose by 4.1 percent compared to the previous month, MOFCOM said.

As of December 19, nearly 2.7 million vehicles have been scrapped and replaced nationwide, while 3.1 million have been traded in.

Zhang Xiang, director of the Digital Automotive International Cooperation Research Center at the World Digital Economy Forum, told the Global Times on Tuesday that year-end promotions are a common practice among automakers looking to boost sales in the final stretch of the year. 

Typically, consumers tend to purchase vehicles toward the end of the year, and the Chinese market presents a significant opportunity for global automakers, Zhang noted.

According to data from the China Association of Automobile Manufacturers, total auto sales in China surged 12 percent year-on-year to top 30.09 million units in 2023, while output exceeded 30.16 million units, up 11.6 percent compared with the 2022 level.

For many automakers, China represents their largest market, and establishing a strong foothold here can greatly enhance their global standing, providing a unique development opportunity for those looking to expand their market presence, Zhang added.

In this context, more global companies are increasing their investments in China and accelerating their transition to electrification. 

Honda Motor (China) Investment Co announced that GAC Honda Automobile Co, a Honda automobile production and sales joint venture in China, began operation of its newly constructed new-energy vehicle (NEV) production plant in South China's Guangzhou on Monday. 

The new plant features the latest production equipment for achieving a highly efficient, smart, and low-carbon production system, Honda said on its official website.

The new plant has a designed capacity of 120,000 vehicles per year and incorporates over 30 globally leading technologies, more than 50 domestic innovations, and nearly 60 Honda global first applications, according to GAC Honda Automobile Co.

This move came after Audi started production of electric models at its new plant in China.

The Audi FAW NEV Company, a cooperation project between Audi and FAW, began production of all-electric Audi models at its new production site in Northeast China's Changchun on December 18. A China-specific variant of the Audi A6 e-tron is set to follow, Audi told the Global Times in a statement on Tuesday.

"With the start of production at Audi FAW NEV Company, we are upholding our commitment to the Chinese market and taking a significant step forward in our electrification strategy," said Gernot Döllner, CEO of Audi AG in the statement.

"The models produced here will play a crucial role in our local portfolio and strengthen our position in this key market," Döllner added.

"With the intense competition in the Chinese market, foreign automakers need to actively adapt to the evolving trends in the automotive industry. It is essential for them to increase investments in the NEV sector and develop new models that cater to the needs of Chinese consumers," Zhang said.