(Yicai Global) July 11 – US electric vehicle colossus Tesla will construct an electric vehicle project with an annual output of 500,000 vehicles in Lingang Area in coastal southeast Shanghai in the largest-ever overseas-financed manufacturing project in the eastern Chinese megacity, official news outlet Shanghai Observer reported.

Tesla signed the project investment agreement with the Shanghai Lingang Area Development Administration and Lingang Group yesterday. Shanghai's city government and Tesla also signed a memorandum of understanding for the project.

Tesla will solely invest in and erect the Tesla Gigafactory 3 in Lingang Area, which will feature a mix of such functions as research and development, production and marketing, and have a planned annual output of 500,000 vehicles.

Tesla (Shanghai) Electric Vehicle R&D and Innovation Center founded simultaneously will be part of Tesla's global R&D system, and will mainly innovate electric vehicles.

Tesla chief executive Elon Musk and Ying Yong, mayor of Shanghai, also jointly unveiled the nameplates of Tesla (Shanghai) and Tesla (Shanghai) Electric Vehicle R&D and Innovation Center yesterday.

Ying said Shanghai welcomes Tesla's move in settling its full industry chain of the R&D, manufacturing and marketing of BEVs in Shanghai. The Shanghai authorities will lend full support to the construction of Tesla's lithium-ion battery Gigafactory 3, and work to create a sound environment for all enterprises operating in Shanghai -- including Tesla -- and deliver better services.

Musk noted that Tesla will construct the first gigafactory outside of the US, the most advanced electric vehicle facility, in Shanghai, which he hopes to build into a paradigm for sustainable development.

Editor: Ben Armour