Hong Kong (CNN Business) Tesla started delivering its Shanghai-made Model 3 cars to the public in China on Tuesday, the first step in CEO Elon Musk's much bolder plan for the world's biggest market.

Speaking at a ceremony to mark the first deliveries, Musk announced that Tesla will also make the Model Y , its lower-priced SUV, at its new Shanghai factory, and plans to open a design center in China with the aim of creating an "original car" for sale in markets around the world.

"Ultimately the Model Y will have more demand than probably all of the other cars of Tesla combined," he said.

The company will increase its investments in China to make the Model Y, and other future models, he added.

posted for photographs with him, and then took delivery of the cars on site. After Musk danced onto the stage at the ceremony in the Shanghai factory, 10 Chinese owners of Model 3 cars walked on, received car keys from the CEO,posted for photographs with him, and then took delivery of the cars on site.

Tesla CEO Elon Musk speaks during a ceremony at the company's Gigafactory in Shanghai, China, on Tuesday.

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