Six months after Elon Musk said his company planned to build a manufacturing plant in China, it appears that he has picked Shanghai for the location of the new $9 billion Tesla factory, according to a report in Bloomberg.

A “person with knowledge of the matter” who does not wish to be identified claims the government-owned Jinqiao Group has signed a non-binding agreement with Tesla to build the production plant in the Chinese municipality.

The deal could see both companies invest around 30 billion yuan ($4.5 billion) in the project, with the Chinese firm putting up land for most of its share. Bloomberg notes that if this is the case, the investment will be larger than Walt Disney Co.’s $5.5 billion Shanghai theme park.

Part of the reason Tesla requires a new manufacturing location is due to the huge demand for the upcoming Tesla Model 3, which received nearly 300,000 pre-orders just three days after being unveiled.

Basing the plant in Shanghai will allow Tesla to avoid China's 25 percent import tax, which it currently pays on every vehicle shipped into the country.

There’s still been no official announcement of the agreement. Shanghai Jinqiao Export Processing Zone Development Co, a publicly traded unit of Jinqiao Group, said its parent company hadn’t signed any documents relating to a Tesla factory in China, but shares in both firms increased following news of the rumored deal.

“This would be a major win for Tesla and Shanghai,” said Steve Man, an auto analyst at Bloomberg Intelligence. “The investment will probably include a nationwide dealership network, superchargers, R&D center and potentially a second ‘Gigafactory.”

Tesla spokeswoman Khobi Brooklyn said the company wouldn’t comment on “rumor and speculation.”