The latest aerial photos showed that Tesla's Shanghai Gigafactory has begun production of the Model Y. About 40 of the compact SUVs are parked in the parking lot, each covered in a protective cover.

The vehicles appear to be ready for delivery to customers, and they are more refined than other Model Ys spotted in recent months, NetEase Tech reported Friday.

(Source: NetEase Tech)

As the Model Y enters production, Tesla appears poised to begin mass deliveries of the all-electric crossover in January 2021, the report said.

That should help Tesla's Shanghai plant meet its production goal of producing 550,000 electric vehicles next year, including about 250,000 Model Ys.

The Model Y is expected to be Tesla's best-selling model, even surpassing the Model 3, which continues to dominate the electric car market in China and around the world.

There are also reports that Tesla CEO Elon Musk is preparing to travel to China after the New Year, possibly to oversee the production and delivery of the Model Y.