Tesla currently has a lot of plans in for the future of its model lineup – from building an optional rocket boosted Roadster, to the yet-to-be-named electric pick-up truck with an 800 km range. In the nearer future however, the electric vehicle manufacturer appears to be planning to invest $5 billion to build a factory in China due to the trade war happening between the U.S. and China.

According to a report by Bloomberg, Tesla is considering raising funds to build a new plant in China, specifically positioned near Shanghai. Should the plan push through, this would allow Tesla to double the company's manufacturing capabilities. That said, funds for the plant will likely come from Chinese funding partners in order to raise the required $5 billion as well as its ambitious future expansion plan which includes establishing a factory in Europe.

A plant in China could prove to be cruicial for Tesla after the nation imposed a 25-percent additional tariff US-made import vehicles. China is said to be the world's biggest market for electric vehicles and the second largest market for Tesla, with the US being the first. According to Bloomberg's source, the China plant could begin producing the Model 3 as early as 2020.

The cost of the factory is still unknown despite Tesla announced having a preliminary agreement with Shanghai in the previous month. Furthermore given that the plant pushes through, it will also be the first production facility in China wholly owned by a foreign automaker. Tesla CEO Elon Musk however says that there is no need to sell new shares or bonds, as the company will be able to fund itself by manufacturing more Model 3s.