Telsa is planning to build a large new plant in China, the company confirmed on Tuesday.

"Today, we have signed a Cooperative Agreement for Tesla to start building Gigafactory 3, a new electric vehicle manufacturing facility in Shanghai," a Tesla spokesperson said in an emailed statement Tuesday. "We expect construction to begin in the near future, after we get all the necessary approvals and permits. From there, it will take roughly two years until we start producing vehicles and then another two to three years before the factory is fully ramped up."

The company said the factory will eventually be able to produce 500,000 vehicles per year for Chinese customers.

"Tesla is deeply committed to the Chinese market, and we look forward to building even more cars for our customers here," the spokesperson added.

Bloomberg first reported on Tuesday the company is due to sign a memorandum of understanding on the factory with “local entities” in Shanghai and the plant will have a capacity to make 500,000 vehicles per year.

Shares of Tesla rose 1.2 percent Tuesday.