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Tesla to invest $5 billion in Shanghai factory

Tesla CEO Elon Musk speaking to a crowd in front of a Tesla car.
Elon Musk in Beijing, China, in October. Photo: VCG/VCG via Getty Images.

Tesla is planning on investing $5 billion in a factory built near Shanghai due to the ongoing U.S.-China trade war, Bloomberg reports.

Why it matters: China is the second-largest market for the electric car company, per Bloomberg, and it recently imposed 25% in retaliatory tariffs on American-made cars, bringing the total to 40%. Tesla hopes to produce its Model 3 — which has faced serious production difficulties at its U.S. plant — at the new factory by 2020.