Tesla has reached a preliminary agreement with the municipal government of Shanghai to build a factory capable of pumping out 500,000 vehicles per year, the company said on Tuesday. According to a statement from the Shanghai government, the project would represent the largest foreign-invested manufacturing plant in the city’s history.
The electronic vehicle maker said that it would take about two years before production is up and running at the facility, and then another two to three years before it would be up to full capacity.
“Tesla is deeply committed to the Chinese market, and we look forward to building even more cars for our customers here,” the company said.
The announcement comes amid news of other high-profile deals for foreign investment in China, including German chemicals firm BASF’s announcement on Monday that it is considering a massive US$10 billion expansion in Guangdong province.
It also coincides with the Trump administration’s push to pressure China on trade, and follows a move by Harley-Davidson to move some manufacturing overseas in response to tariffs.
Shares of the carmaker jumped as much as almost 3.0% on Tuesday on the news.
Chinese Vice Premier Wang Yang meets with Tesla CEO Elon Musk in Beijing pic.twitter.com/HSM5kxBvYF
— China Xinhua News (@XHNews) April 25, 2017
The deal is the culmination of more than a year of Tesla founder and CEO Elon Musk’s efforts to open a plant in China, which will represent the first wholly foreign-owned car manufacturing facility ever in the country.