Tesla's Gigafactory 3 will be up and building cars by the end of the year, report says

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Tesla has been toiling away trying to get its third official Gigafactory near Shanghai online and ready for production, and the work has gone at an almost shockingly quick pace. So quick in fact, that Morgan Stanley's Chinese automotive team said that it should be ready to start building cars by the end of the year, according to a report published Wednesday by Electrek.

The cars being built in that time wouldn't be like the cars from the company's Fremont factory, though. Instead, they'd be built from what are called complete knockdown kits or partial knockdown kits. This means that the cars are partially assembled elsewhere and Shanghai would be responsible for final assembly.

This is relatively standard practice throughout the industry. Many manufacturers, such as Ford and others, have done it to get models such as vans or SUVs into the US without having to pay the "Chicken Tax" on imported light trucks and SUVs.

Morgan Stanley's team estimates that Tesla's Shanghai facility should be able to produce 35,000 to 40,000 vehicles in 2020 and that number could increase to as many as 60,000 cars in 2021. That's not anywhere near the level of Fremont's output, but that's also likely just a starting point. Fremont's production rate didn't happen overnight.

"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," said Morgan Stanley's analyst, in a statement. "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."

Elon Musk's estimates for production in China are predictably more grand, with his estimates placing the figure somewhere between 50,000 and 100,000 Model 3s per year by the end of 2019. 

Tesla offered no official statement regarding Chinese production estimates, or Morgan Stanley's report.