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Tesla urged to build gigafactory in Teesside as Elon Musk plots new plants around the world

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MARCH 22: Newly completed Tesla electric cars at the official opening of the new Tesla electric car manufacturing plant on March 22, 2022 - Getty Images Europe
MARCH 22: Newly completed Tesla electric cars at the official opening of the new Tesla electric car manufacturing plant on March 22, 2022 - Getty Images Europe

Elon Musk has been urged to bring a Tesla plant to the North East of England after the electric car company revealed its ambition to build a dozen “gigafactories” across the world.

Ben Houchen, the Conservative Mayor for Tees Valley, wrote to Mr Musk on Friday calling on the Tesla billionaire to bring an electric car plant to the North East.

In a letter seen by The Telegraph, Mr Houchen wrote: “In the UK, where we have an £82bn automobile industry which leads the world in production of high end vehicles, it would surely make sense for Tesla to develop a serious presence, with Teesside being the best possible location to do this.”

The Mayor said Teesside could offer Tesla “hundreds of acres of ideal developable land” while avoiding “the bureaucratic entanglements seen at other sites”.

Tesla has experienced delays getting its Berlin car factory up and running and Mr Musk has bemoaned the red tape involved in opening the German plant. The project has encountered objections from unions and environmental protesters.

Mr Houchen’s letter came after Mr Musk on Thursday night said Tesla planned to open up to a dozen more electric car factories to add to its plants in California, New York, Texas, Berlin and Shanghai. He told investors the company planned to build “at least 10 or 12 gigafactories” and could announce its next site by the end of the year.

Aerial view of Tesla Shanghai Gigafactory at Lingang New Area on July 11, 2021 in Shanghai, China. - Visual China Group
Aerial view of Tesla Shanghai Gigafactory at Lingang New Area on July 11, 2021 in Shanghai, China. - Visual China Group

The electric car company is currently planning to produce 1.5 million vehicles in 2022, but Mr Musk ultimately wants Tesla to build as many as 20 million cars per year. That would be double the number of Toyota, the world's largest car manufacturer, which sold 9.6 million cars last year.

Mr Houchen said Teesside would be able to offer Tesla access to customs incentives via the Teesside Freeport, which opened in November 2021.

A total of 21,000 new Tesla’s have hit the road in the UK so far this year, according to industry figures. The UK has banned new petrol vehicle sales from 2030.

At Tesla’s shareholders meeting on Thursday, Mr Musk asked investors to shout out where he should build his next factory. He said: “We got a lot of Canada, I am half-Canadian, maybe I should?” Mr Musk was born in South Africa to a Canadian mother.

Mr Musk previously told Tesla staff that he was considering other sites in North America for a future factory, including Canada and Mexico.

In 2019, he said Brexit prevented him from picking the UK for a Tesla factory.

“Brexit made it too risky to put a gigafactory in the UK," the billionaire said.

He also floated the idea of bringing a factory to Russia while speaking to an audience in Moscow in 2021. However, the billionaire has been a vocal supporter of Ukraine following Russia’s invasion and has provided assistance in the form of satellite connectivity via his Starlink business.

Mr Musk’s factory plans come as electric van start-up Arrival, which has a factory in Bicester, paused work on a planned electric car and electric bus as it seeks to slash costs. Shares in Arrival have fallen nearly 80pc so far this year.

In July, Tesla reported its revenues had fallen for the first time in a quarter after lockdowns in China held up car production.

Tesla shares have rebounded in the last month to around $922, although they remain around 20pc down on the start of the year. Tesla said on Thursday it would conduct a three-to-one stock split on its issued shares.

Sales of electric cars are growing in the UK even as the wider car industry sales suffer. On Thursday, the Society of Motor Manufacturers and Traders reported a 9pc fall in new registrations for July, although electric vehicles grew their market share to 10pc.

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