The story has been updated.
Tesla is fast tracking its first overseas plant in Shanghai, China.
The Palo Alto, Calif.-based electric car maker reported its first profit in two years on Wednesday and announced an ambitious plan to move part of Model 3 production to China in 2019. This is a jump from its estimate three months ago when it said “it will take roughly two years until we start producing vehicles” in China.
In July, Tesla raised the price of its Model X and S cars by about 20% in China because of tariffs. The company wants to capture the world’s largest market for electric vehicles by pushing local production. “In order to significantly increase the affordability of Model 3, we have decided to accelerate our manufacturing timeline in China,” Tesla said on Wednesday.
The 213-acre land Tesla paid $140 million on is still in the early stages of an environmental impact assessment. Tesla also revealed its Chinese Gigafactory will sell only to domestic customers.
Tesla plans to produce 250,000 Model 3s and Model Ys annually in its factory in China, according to a notice released on the Shanghai government’s website on Wednesday. The notice called for an environmental impact assessment of Tesla’s Shanghai Gigafactory project and revealed for the first time which model cars will be produced in the plant.
Seeking public opinion and suggestions on the environmental impact of the new factory before it goes into construction is a standard process of big projects in China. The environmental examination will take about 10 days and moves Tesla (TSLA) one step closer to breaking ground on the plant.
The goal of making 250,000 cars annually only applies to Phase I of the plant, since the company’s ultimate production goal for the plant is 500,000 a year. Reuters previously reported Tesla is targeting November 2019 for the start of production for its Model Y sports utility vehicle, and production in China to begin two years later.
Shares of Tesla jumped about 12.5% to $325 each as of 4:50 p.m. ET following the earnings report.
Krystal Hu covers technology and economy for Yahoo Finance. Follow her on Twitter.
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