Tesla's (NASDAQ: TSLA) Gigafactory in Shanghai has further raised its parts localization rate to 98%, showing that the US EV maker is now even more closely tied to the local supply chain at its largest production base worldwide.

Tesla disclosed the latest figure in an official press release during the ninth China International Import Expo (CIIE), which opened in Shanghai on Thursday.

Over the past several years, Tesla had consistently described the parts localization rate at Gigafactory Shanghai as "over 95%."

Beyond the increased share of parts supply, Tesla's collaboration with local Chinese partners has extended into product development. For example, comfort features such as the armrest and leg supports on the seats of the Model Y L were co-developed by Tesla and Chinese suppliers to cater to local user needs.

The model, first launched in the Chinese market, has since entered Asia-Pacific markets including Japan, South Korea, and Australia, and was launched in the US market in July this year.

Tesla has currently signed up more than 400 local tier-1 suppliers in China, with more than 60 of them having entered its global supply chain system. This year also marks the fifth anniversary of the completion of Tesla's Shanghai R&D and Innovation Center.

Gigafactory Shanghai broke ground in January 2019 and began production at the end of the same year. It is China's first wholly foreign-owned vehicle manufacturing project, with an annual production capacity of about 1 million vehicles, mainly producing the Model 3 and Model Y.

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