Tesla to open new production factory in Shanghai

July 10 (UPI) -- Tesla will open a new electric car production plant in Shanghai, eventually doubling its production, CEO Elon Musk announced Tuesday.

The auto plant, Tesla's first outside the United States, is expected to produce 500,000 vehicles a year sometime in the next decade, Shanghai authorities said.

The Shanghai municipal government said it will "fully support the construction of the Tesla factory."

Production at the Shanghai factory is expected to begin two years after the start of construction on the factory and will ramp up to the goal of 500,000 vehicles per year two to three years later.

The 500,000-vehicle-per-year production plan for the Chinese factory is equal to the production from Tesla's Fremont, Calif., factory.

"Today's announcement will not impact our U.S. manufacturing operations, which continue to grow," a Tesla spokesman said.

China is Tesla's second largest market after the United States. The company sold 17,000 cars in the country last year, as well as 50,000 in the U.S. and 103,000 globally.

The move comes after China announced plans to ease rules on foreign makers, which forced them to manufacture cars with Chinese partners to avoid paying steep import tariffs.

Earlier this month, Tesla met a goal to produce 5,000 Model 3 electric cars at its California factory.