This photo taken on Oct 18, 2019, shows a birdview of the Tesla Gigafactory under construction at the Lin-Gang Pilot Free Trade Zone in Shanghai, China. [Photo/IC]

Tesla said the Shanghai gigafactory is already producing full vehicles on a trial basis ahead of schedule, from body and paint to general assembly. The factory is about 65 percent cheaper to build than the Model 3 production facility in the United States."China is by far the largest market for mid-sized premium sedans. With Model 3 priced on par with gasoline powered mid-sized sedans, we believe China could become the biggest market for Model 3," the company said in the report.

"We are also ahead of schedule to produce Model Y and now expect to launch by summer 2020," the carmaker said.

The Model Y equipment installation in Tesla's Fremont factory is underway in advance of the planned launch next year. "We are moving faster than initially planned, using learnings and efficiencies gained from the Shanghai factory design," Tesla said.

Tesla Shanghai gigafactory, the largest foreign-invested manufacturing project in Shanghai, broke ground in January this year.