Tax on Tesla’s Shanghai Plant: $323 Million

Tesla Inc. will be required by the end of 2023 to pay annual taxes of about $323 million for the factory it is building in Shanghai, according to The Nikkei.

Terms of the leased land say if Tesla fails to make the payments, the site will revert to the local government, the Tokyo-based newspaper says.

The carmaker showed photos last week indicating at least part of the new plant is already being fitted with heavy machinery. The company aims to begin low-volume production by year-end and is targeting annual output of about 150,000 of its Model 3 midsize sedan (pictured).

The Chinese version of the car carries a base price of $47,700. The company is taking pre-production reservations now through its Chinese website.

The new factory is expected to add Tesla’s upcoming Model Y midsize crossover vehicle in a year or two. CEO Elon Musk also has said the facility will be equipped to make batteries. But Tesla says the timing of the expansions is uncertain because they depend upon regulatory approvals and a sufficiently strong local supply chain.