Now playing
01:53
How Tesla made electric cars sexy
Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019. (Photo by Frederic J. BROWN / AFP)        (Photo credit should read FREDERIC J. BROWN/AFP via Getty Images)
FREDERIC J. BROWN/AFP/AFP via Getty Images
Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019. (Photo by Frederic J. BROWN / AFP) (Photo credit should read FREDERIC J. BROWN/AFP via Getty Images)
Now playing
03:06
SEC: Elon Musk officially named 'Technoking of Tesla'
Bitcoin
CNN
Bitcoin
Now playing
03:17
Tesla invests $1.5 billion in bitcoin
CNN
Now playing
03:14
In 2010, Elon Musk had big plans for Tesla. Listen to his predictions
Tesla co-founder and CEO Elon Musk introduces the newly unveiled all-electric battery-powered Tesla Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)
FREDERIC J. BROWN/AFP/Getty Images
Tesla co-founder and CEO Elon Musk introduces the newly unveiled all-electric battery-powered Tesla Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)
Now playing
02:01
Elon Musk has a lot to say about Covid-19. Some of it isn't true
Tesla Cybertruck
Tesla
Tesla Cybertruck
Now playing
01:36
Watch the Tesla Cybertruck's unbreakable windows break
Brussels, Belgium, Jan 18, 2019: metallic red Tesla Model 3 and blue Tesla model X at Brussels Motor Show.
Grzegorz Czapski/Shutterstock
Brussels, Belgium, Jan 18, 2019: metallic red Tesla Model 3 and blue Tesla model X at Brussels Motor Show.
Now playing
03:33
Analyst: We see good things happening with Tesla
Now playing
01:09
Elon Musk busts a move in Shanghai
Gabe Ramirez/CNN
Now playing
01:19
See Tesla's new Model Y
Sean R Clark/CNN
Now playing
03:16
Tesla's Model 3 is a top seller. But it's not the electric car for everyone
Bloomberg/Getty Images
Now playing
03:21
Hear some of Elon Musk's most ambitious predictions
CHICAGO, IL - JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O'hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)
Joshua Lott/Getty Images North America/Getty Images
CHICAGO, IL - JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O'hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)
Now playing
00:53
Musk opens up about Tesla's near 'death'
Now playing
01:04
Hear Elon Musk's bold predictions for Tesla robotaxis
Elon Musk's Power Cut_00013520.jpg
Elon Musk's Power Cut_00013520.jpg
Now playing
02:41
Investor: Have to take 'good and bad' with Elon Musk
Tesla
Now playing
01:30
Tesla cuts jobs to offset Model 3 cost
(CNN Business) —  

Tesla CEO Elon Musk is pushing ahead with global expansion plans after beating his deadline to start making cars in China.

The company told investors Wednesday that Tesla’s (TSLA) new Gigafactory in Shanghai started trial production “ahead of schedule” this month and is building “full vehicles, from body to paint to general assembly.” And the company plans to announce the location of its next Gigafactory in Europe by the end of the year, Musk added.

A couple of sprawling, international production plants will likely be critical to Tesla’s future. Easier access to major global car markets — China is the world’s largest — could give the company tens of millions of potential new customers. And success for Tesla in China and elsewhere could boost confidence that the company has the ability to hit delivery targets as it grows.

The Shanghai factory is also notable for how quickly it came together. It was only 10 months ago that Tesla broke ground on the plant. And in a letter to shareholders, the company said the facility was about 65% cheaper to build than its Model 3 production plant in the United States.

“We have also dramatically improved the pace of execution and capital efficiency of new production lines,” the company said in its letter.

Musk even implied that the Shanghai factory could become the new normal for Tesla. He called it the “template for future growth.”

Investors are encouraged by Tesla’s progress. The stock is still down more than 23% this year, but solid earnings for the third quarter, including an unexpected profit, sent shares soaring 20% after hours on Wednesday.

“I’m very impressed,” said Tu Le, founder of Beijing-based consulting firm Sino Auto Insights, of the Shanghai plant. “Living in China, nothing [usually] happens that fast.”

Tesla didn’t get there without help. Le pointed out that the company has gotten significant support from the Chinese government in the last year. It was the first foreign automaker to be allowed to open a factory in the country without a Chinese partner, and it recently won a tax break for some of its cars.

Workers on cranes installing a logo at the Tesla Gigafactory 3 earlier this month in Shanghai.
VCG via Getty Images
Workers on cranes installing a logo at the Tesla Gigafactory 3 earlier this month in Shanghai.

If all goes according to plan, Musk says the Shanghai plant could enable Tesla to eventually triple its overall output. It’s expected to produce the best-selling Model 3 along with the Model Y, a cheaper version of Tesla’s Model X SUV that’s on its way to market.

Tesla has said the initial goal for the Shanghai factory is to make 250,000 cars a year before ramping up to 500,000 units.

That’s welcome news for a company entering the fourth quarter with an order backlog.

“This is kind of working out well for Elon Musk’s long-term strategy forward,” Le said. “His goal for Tesla was to really alter the traditional automotive sector, right? And I think you have to be a volume seller in order to do that.”

While the company has built momentum in China, success may not come easy. China’s car market has been in a slump, and that decline has been exacerbated this year by a slowing global economy.

And while Tesla has strong international brand recognition, Le said, it faces fierce competition from local and international players. The company has in the past refused to advertise, spending the money instead on developing the product and letting the cars speak for themselves. That may have to change.

“I think they’re going to have start spending marketing dollars in China,” Le said.

He also warned that Tesla will also have to pull off a “flawless launch” of its Chinese-made vehicles as they roll off the production line in the next few months. Otherwise, the company risks losing trust with consumers.

Put simply, the stakes are high.

“China’s just a huge market, versus the United States and [Europe], which are much smaller markets,” Le said. “If he doesn’t do well in China, then he doesn’t hit his goals,” Le said.