TESLA Inc. chief executive officer Elon Musk on Tuesday landed a deal with Chinese authorities to build a new auto plant in Shanghai, its first factory outside the United States, that would double the size of the electric car maker’s global manufacturing.

The deal was announced as Tesla raised prices on U.S.-made vehicles it sells in China to offset the cost of new tariffs.

Tesla plans to produce the first cars about two years after construction begins on its Shanghai factory, ramping up to as many as 500,000 vehicles a year about two to three years later, the company said.

That would make Tesla’s Shanghai plant large by auto industry standards, where most factories are tooled to build 200,000 to 300,000 vehicles a year, roughly equivalent to the planned annual production at Tesla’s plant in Fremont, California.

Musk has said Tesla will be cash-flow positive this year. Analysts have predicted it will raise capital to fund a list of new projects, including launching an electric semi truck, a pickup truck, a compact SUV and new battery and vehicle production facilities that Musk has proposed for China and Europe.

“I am sure that Tesla needs fresh money at the latest next year,” said Frank Schwope, an analyst with NORD/LB.

Tesla said Tuesday’s announcement will not impact U.S. manufacturing operations, which continue to grow.

China is the largest market for electric vehicles, and analysts predict that electric vehicle sales in the country will accelerate rapidly as government regulation drives toward a goal of 100-percent electric vehicles by 2030.

More than 28 million vehicles were sold in China last year, and annual sales are forecast to top 35 million by 2025. That would be more than double the current U.S. market, where new light vehicle sales run at about 17 million vehicles a year.

Musk was talking about building a Chinese factory long before the Trump administration proposed punitive tariffs on Chinese goods.

“The Shanghai plant will certainly improve Tesla’s positioning in China and allow it to locally produce and avoid import tariffs. The relaxation of the 50/50 rule for JVs in China uniquely benefits Tesla because they did not have an existing JV in China” as rivals do, said Tasha Keeney, an analyst with ARK Invest.(SD-Agencies)