WATCH: Elon Musk says Tesla's Shanghai factory is 'groundbreaking'

Tesla CEO Elon Musk says the automaker is breaking ground for a Shanghai factory and will start production of its Model 3 by the end of the year.

Musk said Monday on Twitter, "Looking forward to breaking ground on the @Tesla Shanghai Gigafactory today!"

READ: Tesla secures land in Shanghai for first factory outside of the US

Tesla announced plans in July to build its first factory outside the United States in China, the biggest electric vehicle market, despite trade tension between Beijing and Washington.

Musk said the Shanghai factory will produce "affordable versions of 3/Y for greater China." He said higher-priced models will be built in the United States.