A customer test drives a Tesla car at a showroom in the US automaker's gigafactory in Shanghai. (Photo: China Daily)

Electric car leader Tesla reported surprise second quarter global sales revenue of $6.03 billion despite the COVID-19 upheaval, with its Shanghai gigafactory making a great contribution by delivering 31,000 cars while the company's three US factories suspending production for nearly two months.

China has become an important earner for Tesla. The 31,000 cars comprised one third of Tesla's total global sales volume from April to June. According to the company's second quarter fiscal results, sales revenue in China jumped 103 percent year-on-year to reach $1.4 billion, accounting for 23.14 percent of the company's total top line.

Based on the performance of the Shanghai gigafactory, Tesla CEO Elon Musk said during the World Artificial Intelligence Conference in Shanghai last month that they are building an engineering team in China to come up with more original engineering research and development in the country.

Tesla's rapid development in China is closely related to the efforts made by the Lingang Special Area Administration－part of the China (Shanghai) Pilot Free Trade Zone－where the new energy vehicle maker is located. In July 2018, Tesla signed an agreement with the Lingang Special Area Administration to build a production base in Lingang. With total investment of 50 billion yuan ($7.2 billion), the Shanghai gigafactory is Tesla's first such facility outside the United States. It is also the largest foreign-invested manufacturing project in Shanghai.

The Shanghai gigafactory started churning out its first cars on Nov 7, only 16 months after the agreement was signed. The high efficiency of Lingang as well as the number of favorable policies in the area will help undergird Tesla's ambitions, said the company's global vice-president Tao Lin.

Zhu Zhisong, executive deputy director of the Lingang Special Area Administration, said the successful example of Tesla has been promoted to more companies, making the "Tesla model" a highlight of Lingang.

Zhu added that industrial land can be used for multiple purposes, which is first tried out in Lingang based on Tesla's example. One-stop services are provided for new investment projects in terms of project construction permits and authorization.

"Lingang will work as a testing site for deepened opening-up. It is our job to carry out more reforms and make more breakthroughs so that Lingang can grow into an internationally influential special economic zone," Zhu said.

Moves by companies reflect their appreciation of the high efficiency of Lingang. Publicly available information showed that total fixed asset investment registered in Lingang rose 32.8 percent year-on-year during the first half, while total industrial output increased 26 percent from a year earlier. A total of 141 new projects had been signed in Lingang during the first six months, with investment reaching 176.7 billion yuan.

While company operations were much affected by COVID-19 during the first quarter, the Lingang administrative body came up with favorable tax policies to help companies endure difficulties.

To further facilitate Tesla's operations, the tax bureau carried out tax credit ratings and tax refund application revisions at the same time, and the company will likely receive tax breaks given its massive initial investment.

Wu Jian, director of the Lingang tax bureau, said the Tesla model will be applied to the rest of Lingang.

"The high efficiency experienced by Tesla will become the new normal for all companies registered in the area. More innovative tax services will be incubated in Lingang so that companies can seek more sustained development here," Wu said.