“Looking forward to breaking ground on the Tesla Shanghai Gigafactory today!” Musk tweeted Monday morning Beijing time.
He added in subsequent tweets that the factory will produce Model 3 and Model Y vehicles for the Greater China region, and that the plan is to “finish initial construction this summer, start Model 3 production end of year & reach high volume production next year.”
Musk’s electric car maker acquired the land on the outskirts of the city for about $140 million in October. The luxury vehicle brand is popular in China but faces rising competition from local electric automakers such as Nio.
Producing vehicles in China would reduce costs from tariffs and ocean transport for Tesla. In an Oct. 2 report, the American company said it is operating at a 55 percent to 60 percent cost disadvantage for those reasons and because it cannot access the same cash incentives as local Chinese manufacturers.
Tesla’s new factory is expected to begin partial production in the second half of this year, according to a government report. The company has set up official accounts on popular Chinese messaging and social media platforms WeChat and Weibo, which list more than 30 openings for positions at the Shanghai factory.