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Musk’s announcement came after he met with Li Xiaopeng, China’s transport minister, according to the report. He also toured the site of a future Tesla factory near Shanghai which will be its first factory outside the U.S.
Tesla plans to start making its top-selling Model 3 at the plant later this year. The company has said it plans to build 3,000 cars there per week.
Tesla is opening the Chinese factory amid the ongoing trade war between the U.S. and China that has left other companies looking for manufacturing alternatives. The move will help Tesla get around having to pay extra tariffs on imports to China. The country plans to continue in December a suspended 25% duty on cars from the U.S.
Tesla raised its prices in China last week as the price of the yuan sunk. Even with the new factory, it could have to raise prices on other models there again.
The Tesla news came a week after President Trump said companies should move manufacturing back to the U.S. from China. Earlier this year, U.S. officials reportedly denied requests from Tesla for an exemption on some Chinese-made computer components.
A new round of U.S. tariffs on goods from China went into effect Sept. 1. China has threatened to sue the U.S. through the World Trade Organization to dispute the 15% tariffs on $112 billion in goods.