Tesla confirms plans to build a second Chinese factory.

Tesla has been operating a vehicle factory in China since 2019 and has now confirmed plans to build a second factory in China to meet strong domestic and international demand.

Tesla made this confirmation in a letter sent on May 1 to officials in the Shanghai Lingang Special District, where Tesla's existing factory is located.

According to Reuters, which obtained a copy of the letter, Tesla stated in that letter that a new plant with an annual capacity of 450,000 vehicles would be built near the existing plant. The first vehicles to be produced at the new plant are expected to be the Model 3 and Model Y.

The Lingang Special District is a free trade zone located south of Shanghai. The Tesla factory there is the first car factory in China that is 100% owned by a foreign company. It produces the Model 3 and Model Y, both for domestic sales and for export, and produced 484,130 vehicles in 2021, or more than half of Tesla's record delivery of 936,000 vehicles that year.

Tesla recently completed a plant near Austin, Texas, to produce the Model Y, and plans to produce the Cybertruck, whose production start has now been delayed to 2023. Tesla's first plant in Fremont, California, still produces the Model S, Model X, Model 3, and Model Y, and the new plant in Reno, Nevada, produces components as well as Tesla's energy storage products.

In its letter, Tesla also thanked Lingang officials for their cooperation in allowing the existing plant to reopen on April 19 after a three-week Covid blockade. Tesla also mentioned the transportation arrangements made for employees working at the plant and the disinfection work that took place at the site.