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 carmaker said it continues to push to increase Model 3 production to about 10,000 units per week.
Tesla also expects to continue to increase Model 3 production rates to about 7,000 units per week at its Fremont, Calif., factory.
China is the largest market for EVs, and most forecasters predict that EV sales in the country will accelerate rapidly as government regulation drives toward a goal of 100-percent electric vehicles by 2030.