Reports indicate that Tesla is ramping up production currently within its facilities in California, and now it seems the company has finalized an agreement to bring some of its production of electric vehicles to China … Shanghai to be exact.

Government officials in Shanghai, as well as Tesla’s CEO Elon Musk have finished negotiations around a deal to bring a facility to China, which is huge part of a long-term effort to create a plant in the country. According to reports, this Tesla plant will be the first-ever in the country that is completely owned by a foreign automaker.

Construction is set soon as Tesla works on gathering permits and approvals. The first cars in production have a rollout deadline of approximately two years. After that, the company hopes for another two to three years for the facility to produce at maximum capacity, which is being estimated at about 500,000 cars annually. For comparison purposes, Tesla California plant produces 1,000 vehicles daily; however, it’s important to note that the facility required an expansion outdoors in order to hit these numbers.

Auto Trader revealed that Chinese tariffs in the country is a cause for concern as they equal out to create expensive Tesla cars though. In China, a Model S begins at about 710,600 yuan, equalling to about $107,300 USD, where it would start at about $73,600 normally. Still, the market in China is the biggest one for EVs worldwide, with sales hitting about one million cars possibly for 2018 alone.

Musk recently revealed he has expectations for another facility to hit Europe, and will announce these plans later in 2018. He also stated Tesla’s China plant will most likely be building their Model 3 and Model Y crossover (coming down the pipe soon), versus the pricey Model X or Model S.