Tesla Secures 210-Acre Site For Its Chinese Gigafactory

Tesla has secured the land for its Chinese Gigafactory after signing an agreement with the Shanghai government.

The Palo Alto-based EV maker said in an announcement that they signed a “land transfer agreement” on a 210-acre site in the Lingang district in southeast Shanghai. Tesla’s VP of worldwide sales Robin Ren said that this is a “an important milestone for what will be our next advanced, sustainably developed manufacturing site.”

Tesla has pushed ahead with the development of its first factory outside the U.S., despite the increasing trade tensions between the United States and China, ABC News reports.

China is the second-largest market for Tesla and the world’s biggest for electric cars. Building a factory there will shield the car manufacturer from tariffs and import controls and help it develop new suppliers and make its electric cars more appealing to Chinese customers.

The new factory in Shanghai will be able to build up to 500,000 vehicles once it’s finished, with Tesla saying that production is expected to start two or three years after construction begins. There’s no official information of how much the new facility will cost to Tesla but the Shanghai government said it would be the biggest foreign investment there to date.

With the Chinese government now allowing foreign manufacturers to own factories in the country, Tesla will be able to be competitive in the market, as its cars cost as much as 60 percent more than other electric vehicles offered there.