A general view shows a construction site of a Tesla factory during a ground-breaking ceremony for the factory in Shanghai on January 7, 2019. - Musk presided over the ground-breaking for a Shanghai factory that will allow the electric-car manufacturer to dodge the China-US tariff crossfire and sell directly to the world's biggest market for 'green' vehicles.

State-owned Shanghai Construction Group (SCG) will build the first phase of U.S. electric carmaker Tesla's factory in Shanghai, a news portal reported on Thursday.

Xu Jiandong, a vice-president at SCG, was quoted by Shanghai Observer as saying that the company would fully cooperate with Tesla to achieve its objectives.

The Shanghai Observer is operated by the Jiefang Daily newspaper, which is in turn run by China's ruling Communist Party's Shanghai committee.

Reuters reported in December that several firms, including SCG, were taking part in the bidding.

A Shanghai city government official said on Wednesday that they expect Tesla's vehicle assembly facility to be completed in May this year.