Tesla will start building a new plant in Shanghai next month, bolstering Elon Musk's commitment to doubling China's electric vehicle production, according to the report.
A new plant in China's financial heartland will allow Tesla to produce up to 2 million units a year, putting the electric car maker on par with older car makers that have also set up factories in the Asian country, according to Reuters.
The factory is planned to be built next to the current Tesla plant, known as Gigafactory 3, in nearby Lingang.
Last year, Toyota's factories in China produced 1.6 million vehicles, while General Motors produced 1.4 million. Volkswagen hopes to increase capacity in China to 1 million electric vehicles by 2023.
Tesla currently plans to produce 1 million vehicles, including the Model 3 sedan and Model Y crossover, this year in China.
Tesla hopes to double its manufacturing capacity in China and eventually produce up to 2 million electric vehicles a year.
Tesla hopes to double its manufacturing capacity in China and eventually produce up to 2 million electric vehicles a year.
The expansion of the company's presence in Shanghai is due to the favorable business climate in the city.
Unlike other foreign car manufacturers, Shanghai freed Tesla from partnerships with the domestic automaker, allowing Musk's firm to take full ownership of the facility that makes its products.
Tesla's sales in China have grown and the Shanghai plant has become an important export hub to markets such as Germany and Japan.
Last year, Tesla vehicles made in China accounted for about half of the 936,000 vehicles delivered worldwide, according to Reuters calculations using data from the China Passenger Car Association.
Tesla's deepening ties with China have been criticized in the United States, especially in light of alleged human rights abuses by the government in Beijing.
When Tesla recently opened a car dealership in Xinjiang province, Musk was accused of supporting genocide. Chinese authorities have allegedly persecuted Uyghur Muslims and other religious minority groups in Xinjiang as part of a crackdown that the US government has described as genocide.
Beijing has been accused of setting up forced labor camps and centers in the brutal crackdown on religious and ethnic groups in Xinjiang. The Chinese government denies the allegations.
