SHANGHAI – Tesla (NASDAQ) Inc is planning to begin construction on a Shanghai plant as early as next month. It’s part of a larger plan to double China’s production to satisfy growing Chinese demand.

According to people who requested anonymity in the discussion of still-private plans, Tesla’s new Shanghai plant will be fully functional and capable of producing up to 2,000,000 cars annually.

New plant will be built in the immediate vicinity of Lingang New Area’s current production site in Pudong.

Tesla refused to comment.

If the expansion goes through, it would allow Tesla EV-dedicated manufacturing capacity to be placed in the largest market for autos in the world, on par with established brands like those in China.

In contrast, Toyota Motor (NYSE:) Corp manufactured 1.6 million cars in China by 2021. General Motors (NYSE) jointly produced 1.4 Million vehicles in China with major Chinese partner SAIC Motor Corp. Volkswagen (DE) intends to produce 1,000,000 EVs in China within 2023.

It was not yet known what the cost would be and when Tesla will complete it.

After less than a decade of breaking ground, Tesla began production in Shanghai. It produces both the Model Y and sedan versions of the Tesla Model 3.

According to two sources, Tesla is on track to produce approximately 1 million cars this year through expansion plans at its current plant. One source said the other depended on availability of parts.

One source said that Tesla is planning to increase its weekly production to around 22,000 units at the plant over the next few months.

The plant would produce approximately 1.1million vehicles per year at this production rate, which is more than twice its original capacity.

Reuters had previously reported that Tesla may increase its production capacity at the current site.

A request to comment was not received by the Shanghai government immediately.

Shanghai supported Tesla’s creation of a Chinese wholly-owned plant – which was the first foreign automobile plant that did not need to be a part of any joint venture.

Tesla stated in an earlier regulatory filing that it had filed with Shanghai this week that it plans to increase parts production, hire additional workers, and run its Shanghai factory longer per day to satisfy growing export demand.

China is where Tesla has experienced a boom in sales. The factory’s Shanghai location has been a vital export hub, supplying key markets like Germany and Japan. Based on data from China Passenger Car Association, Reuters calculated that Tesla produced around half the 936,000 cars it shipped globally last year.

Tesla earlier this month stated that China’s revenue has more than doubled from last year to $13.8 billion in 2021. Elon Musk stated in October that Shanghai’s Fremont, California plant had been outperformed by Shanghai — which was the first factory in his company.

Tesla was unable to open a factory in Germany due to delays. Musk initially hoped to open a Berlin facility in July 2013. A court challenge to the water supplier’s licence has complicated approval of the plant.