On Friday, the 4th of January, the Tesla Inc. said that they had been planning to start delivering their Model 3 cars to the customers in China from March, 2019, concreting the time-frame, which was tweeted by Tesla head, Elon Musk previous year.
The Securities and Exchange Commission, which ended up fining Musk and Tesla $20 million each over the August 7 tweet, as well as removing Musk as chairman and forcing the addition of two independent directors to the board, found in a probe that Musk's relationship with Grimes played a role in setting the price he said he would ask for Tesla.
Typically, pretrial information sharing in shareholder securities fraud cases doesn't begin until after a complaint has been legally tested in court, which hasn't happened yet in the Musk tweet litigation.
The carmaker, which now imports US-made vehicles to sell in China, is building the plant in a market that is set to contract this year for the first time in decades, although electric auto sales have been strong.
A local Chinese plant may be crucial for Tesla, which is struggling to stave off a potential dip in demand at home, its biggest market, after reductions in federal tax credits for EVs.
Tesla signed a preliminary agreement with the Shanghai government past year to build the 500,000-unit factory in the Chinese city.
Tesla plans to produce its Model 3 and Model Y cars in the initial phase of production at the Shanghai plant, with an annual capacity of 250,000 vehicles.
Alan Kang, Shanghai-based analyst for consultancy LMC Automotive, said: "Tesla's sales (in China) have dropped over the past few months because of high price caused by the tariffs".
Tesla builds the imported from China on-Board computer in his work in California, Fremont in the cars. "This is going to get extremely ugly.Elon will learn very soon who is more powerful of us two".
"With the construction of the Shanghai factory, the faster the better (for Tesla)", Kang said.
The so-called Gigafactory would also be China's first wholly foreign-owned vehicle plant, a reflection of China's broader shift to open up its auto market even amid a whipsawing trade war between Washington and Beijing.
"Shanghai Giga production of Model 3/Y will serve greater China region", Musk added in another one.