Tesla has started producing the battery cell for the upcoming Model 3 at its massive — and still-under-construction — Nevada Gigafactory, an important milestone as the company prepares to launch its electric vehicle made for the masses.

The information, shared by Tesla CTO JB Straubel during a presentation over the weekend at the Midwest Renewable Energy Association’s Energy Fair 2017, provides an important progress report on a vehicle that is hotly anticipated by critics, fans, and shareholders. Straubel’s comments were first reported by Electrek.

Tesla is just meeting its own deadline

“This is where we’re at today with this project; it’s still got a little ways to go,” said Straubel as he talked about the Gigafactory. “But we’ve started production of Model 3 cells actually right now, so we’re starting to ramp up those cell manufacturing lines and crank this up as we begin to ramp Model 3.”

The $5 billion Gigafactory has been mass-producing the 2170 lithium-ion battery cells — a cylindrical battery designed and engineered with Panasonic — since January. However, these cells were slated for use in Tesla’s commercial and residential energy-storage products, the Powerwall 2 and Powerpack. There are two different types of 2170 cells with two different charging purposes: one for energy products and for electric vehicles.

This 2170 battery cell will not be used in the Model S or X vehicles, Musk confirmed in a tweet on Monday.

Tesla has said Model 3 battery cell production would begin in the second quarter. This means that Tesla, which started Model 3 battery cell production less than two weeks before the second quarter ends, is just meeting its own deadline.

The gigafactory has been mass-producing lithium-ion battery cells since January

The Model 3 vehicle will be produced at Tesla’s factory in Fremont, California, where work began months ago to set up the manufacturing lines. Tesla is supposed to begin production on the Model 3, which starts at $35,000 before federal incentives, next month.

Last year, nearly 400,000 people placed $1,000 refundable deposits to reserve a chance to order the new car. Tesla CEO Elon Musk has said the list of potential buyers continues to grow, though Tesla hasn’t released the number of orders placed since last year.

“We’ve started production of Model 3 cells actually right now.”

But Tesla hitting its production deadline is just the first challenge. Space in its 5.3-million-square-foot Fremont factory is also an issue. The facility was already almost full this year, when it produced 83,922 vehicles, and will only become more cramped as Model 3 production begins. Speaking during the company’s annual shareholder meeting on June 6th, Musk said that Tesla was also shifting production of the Model 3’s electric motor and gearbox components to its Gigafactory, in a bid to lessen the stresses on the Fremont location.