Tesla's giant Gigafactory will begin production by the end of next year, putting the company several quarters ahead of schedule, Tesla said Tuesday.

Tesla broke ground on the giant battery factory in 2014 and originally planned to begin producing cells during 2017. However, global demand has forced the company to ramp up its efforts.

"We have also accelerated plans to begin cell production for Tesla Energy products at the Gigafactory by the end of 2016. This is several quarters ahead of our initial plan," the company said in its third quarter shareholder letter.

In October, CEO Elon Musk hinted that the factory was ahead of schedule when he said at a SolarCity event that the company has already received its certificate of occupancy and would begin production as soon as Spring 2016.

The Gigafactory, which is located just outside of Sparks, Nevada, will produce lithium-ion batteries for Tesla's vehicle and and is expected to reach full capacity by 2020.

Tesla has big plans to build 500,000 vehicles during the next five years, but its most ambitious venture will be beginning production of its mass market car, the Model 3.

The Gigafactory is essential to making this become a reality.

Musk said earlier this year that the Model 3 would go into production after the Gigafactory was up and running and that it would price around $35,000. However, Tesla may also be launching another vehicle called the Model Y around the same time it rolls out the Model 3.

Musk posted a tweet last month that said a Model Y is also in the works, but later deleted the tweets.

Tesla, though, isn't the only company ramping up their timeline to roll out a more affordable, all-electric, long-range vehicle.

A number of automakers have said during the last few months that they also plan to enter the EV market in a big way in 2016 and 2017.

Most recently, General Motors said that it would begin production on its long-range EV crossover called the Bolt before the end of next year. The Bolt is expected to price at about $30,000 and will be able to travel more than 200 miles.