Tesla Inc. said on Friday that it is developing plans to start producing about 3,000 Model 3 vehicles per week in Shanghai in the initial phase of its Gigafactory 3 to reduce the impact of tariffs.
The company also said in a filing that Model S and Model X sales in China have been, and will likely continue to be, hurt by recently increased tariffs imposed by the Chinese government on U.S.-manufactured vehicles.
The electric-car maker said it continues to push to increase overall Model 3 production to about 10,000 units per week.
Tesla also expects to continue to increase its Model 3 production rate to about 7,000 units per week at its Fremont, Calif., factory.
China is the largest market for electric vehicles, and most forecasters predict that electric-vehicle sales in the country will accelerate rapidly as government regulation drives toward a goal of 100-percent electric vehicles by 2030.