Tesla Chief Executive Elon Musk says the company will break ground on Monday for its Shanghai Gigafactory where it will begin making Model 3 electric vehicles (EV) by year-end.
The $US2 billion ($A2.8 billion) factory marks a major bet by Tesla as the US electric vehicle maker looks to bolster its presence in the world's biggest auto market where it faces rising competition from a swathe of domestic rivals and its sales have been hit by increased tariffs on US imports.
Tesla and SpaceX CEO Elon Musk. Source: AAP
Tesla has been pushing forward its plans for the plant after it secured the site in October, hiring staff, starting procurement for building materials and setting up a financial leasing company in the city.
The so-called Gigafactory would also be China's first wholly foreign-owned car plant, a reflection of China's broader shift to open up its car market even amid a whipsawing trade war between Washington and Beijing.
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.
"Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year," Musk wrote in a separate post on Twitter.
"Shanghai Giga production of Model 3/Y will serve greater China region," Musk added in another one.
The gigafactory, with a total investment of 50 billion yuan ($7.25 billion), will have a production capacity of 500,000 units in two to three years. Source: AP
Tesla has said it aims to produce its Model 3 mass-market car from 2019 at the new plant.
Electric carmaker Tesla's first plant outside the US, the Gigafactory 3 in Shanghai, is about to begin construction. Source: AP
China is the largest market for electric vehicles, and most forecasters predict EV sales in the country will accelerate rapidly as government regulation drives toward a goal of 100 per cent electric vehicles by 2030.
