Gigafactory 3 of Tesla Inc. in Shanghai to start production in two years

() Goes abroad after signing an agreement with the Chinese authorities

The electric vehicle manufacturer will build a new car factory in Shanghai, its first international factory, according to a Reuters report .

The agreement is expected to double the size of Tesla's global production.

"Tesla is deeply committed to the Chinese market and we are looking forward to building even more cars for our customers," said CEO Elon Musk. statement to Electrek

READ: Tesla raises prices of S and X model in China in response to tariffs

The automaker said that the building of Gigafactory 3 will start "in the near future "Once he receives all the necessary permits.

It will take about two years before the factory starts to produce vehicles. Two to three years later, the plant is expected to produce about 500,000 vehicles annually.

"Today's announcement will have no impact on our manufacturing operations in the United States, which continue to grow," he adds. An analyst weighs

/ Merrill analyst, John Murphy, sees the Shanghai plant as an opportunity to increase its production capacity, according to a note shared by TheFly.com.

According to a presentation at an investor meeting, Murphy said the company could produce more than 6,000 vehicles by the end of the third quarter. By the middle of 2019, Tesla could produce more than 10,000 vehicles a week

READ: Tesla Reaches its Model 3 Production Target, Sets a Higher Objective for Next Month

However, the analyst has noted the financing risk with cash flow from operations and higher prices due to trade tensions between the United States and China.

Shares of the California company were down about 2% to $ 316.31 on Wednesday before marketing.

Contact Lenore Fedow at [email protected]

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