TESLA Inc. said Thursday it signed an agreement Wednesday to secure land in Shanghai for its first factory outside the United States, pushing ahead with development despite mounting U.S.-Chinese trade tensions.

Tesla announced plans for the Shanghai factory in July after China said it would end restrictions on full foreign ownership of electric vehicle makers to speed up industry development.

Those plans have gone ahead despite tariff hikes by the United States and China on billions of dollars of each other’s goods. U.S. imports targeted by China’s penalties include electric cars. China is the biggest global electric vehicle market and Tesla’s second-largest after the United States.

Tesla joins global automakers including General Motors Co., Volkswagen AG and Nissan Motor Corp. that are pouring billions of dollars into manufacturing electric vehicles in China.

Local production would eliminate risks from tariffs and other import controls. It would help Tesla develop parts suppliers to support after service and make its vehicles more appealing to mainstream Chinese buyers.

Tesla said it signed a “land transfer agreement” on a 210-acre site in the Lingang district in southeastern Shanghai.

That is “an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Tesla’s vice president of worldwide sales, Robin Ren, said in a statement.

Shanghai is a center of China’s auto industry and home to Shanghai Automotive Industries Corp.

Tesla said earlier that production in Shanghai would begin two to three years after construction of the factory begins and eventually increase to 500,000 vehicles annually. (SD-Agencies)