Yesterday, we reported that Tesla was forced to raise their car prices by 20 percent in China to compensate for the country's hefty import tariffs. These tariffs were implemented as a result of China's ongoing trade war with the US.

However, we speculated that Tesla might consider building a factory in China to scale up production and avoid the tariffs entirely. It seems that is precisely what the company plans to do, according to Bloomberg.

Tesla has signed an agreement to develop another Gigafactory, this time in Shanghai. Initially, of course, the factory's production capacity will be limited, but Tesla hopes the factory will eventually be capable of producing 500,000 vehicles per year.

Bloomberg says it could take Tesla anywhere from two to three years – on top of a two-year construction period – to reach that goal.

In a statement to Engadget, a Tesla spokesperson officially confirmed the news.

"Today, we have signed a Cooperative Agreement for Tesla to start building Gigafactory 3, a new electric vehicle manufacturing facility in Shanghai," the individual said. " will take roughly two years until we start producing vehicles and then another two to three years before the factory is fully ramped up to produce around 500,000 vehicles per year for Chinese customers."

Tesla also claims their ambitious overseas goals will have no impact on their US-based operations. If true, that will likely come as a relief to the company's domestic customers and investors, since Tesla has only just managed to produce 5,000 vehicles per week in their US factories.