Just days after saying it would begin making deliveries of its Model 3 sedan to China in March, Tesla has broken ground for a new Gigafactory in Shanghai that Chief Executive Elon Musk has said could end up producing 500,000 cars a year.

Musk took part in the groundbreaking ceremony of the $2 billion Gigafactory, and added on Twitter that Tesla intends to use the facility to produce versions of it Model 3 and upcoming Model Y cars for the Chinese market.

“Shanghai Giga will produce affordable versions of 3/Y for Greater China,” Musk tweeted. “All Model S/X & higher cost versions of Model 3/Y will still be built in US for WW (worldwide) market, incl China.”

Tesla first announced plans for the Shanghai Gigafactory in July. On Monday, Musk also tweeted that Tesla is “aiming to finish initial construction this summer (and) start Model 3 production (by the) end of the year & reach high volume production next year.”

The factory could help Tesla skirt around at least some of the drama involved with the ongoing U.S.-China trade dispute. The countries currently are in a 90-day cooling-off period to allow for more negotiations in an effort avoid a trade war that Tesla has said has the potential to add a 40 percent markup on its cars that are imported into China.

Tesla’s Shanghai Gigafactory groundbreaking comes after the company said last week that it would begin delivery Model 3 cars to buyers in China starting in March. That announcement came on the heel of Tesla saying it would cut the prices of its cars in the U.S. by $2,000 to help offset the reduction in a federal tax credit for the purchase of an electric vehicle that went from $7,500 to $3.750 on Jan. 1.