Tesla's California plant has an annual capacity of 650,000 units, while its Berlin and Texas plants both have an annual capacity of more than 250,000 units.

(Giga Shanghai exterior. Image credit: Tesla)

Tesla's (NASDAQ: TSLA) factory in Shanghai has officially surpassed its plant in California to have the largest capacity.

Giga Shanghai, which makes the Model 3 and the Model Y, now has an annual capacity of more than 750,000 units, according to Tesla's second-quarter earnings report released on July 20 US Eastern time.

This puts Giga Shanghai's capacity above the 650,000 annual capacity of Tesla's California plant, which has an annual capacity of 100,000 for the Model S and Model X and 550,000 for the Model 3 and Model Y.

In addition to these two plants, Tesla's plants in Berlin, Germany, and Texas, US, both have an annual capacity of over 250,000 units. They currently only produce the Model Y.

This means that Tesla now has a global vehicle production capacity of more than 1.9 million vehicles, up from 1.05 million in the first quarter.

For reference, the BMW Group had global sales of 2.52 million vehicles in 2021, Mercedes-Benz at 2.09 million and Audi at 1.69 million.

"While the Shanghai factory was shut down fully and then partially for the majority of Q2, we ended the quarter with a record monthly production level. Recent equipment upgrades will enable us to continue to increase our production rate further," Tesla said in its earnings report.

(Giga Shanghai general assembly. Image credit: Tesla)

It's worth noting that Giga Shanghai still appears to be in the process of upgrading its production capacity.

On June 23, Bloomberg reported that Tesla was taking steps to increase production at its Shanghai plant, partially suspending manufacturing capacity for various periods until early August to upgrade production lines.

The plant's upgrades are expected to be completed around August 7, when production of the Model Y will increase to 14,000 units per week from about 11,000 before the Covid outbreak, and Model 3 production will increase to 7,700 units per week from 5,500 previously, the report said, citing people familiar with the matter.

Tesla plans to double its original annual target to 1 million units, the people said.

Tesla Shanghai plant is the first wholly foreign-owned automotive manufacturing project in China and Tesla's first Gigafactory outside the United States.

Giga Shanghai started construction on January 7, 2019, and delivered the first Model 3 vehicles in December 2019.

Giga Shanghai's annual capacity reached 250,000 units by the end of 2020 and further rose to over 450,000 units in 2021.

In 2021, Giga Shanghai's annual deliveries reach 484,130 units, up 235 percent year-over-year, representing 51.7 percent of Tesla's global capacity.

In addition, during a conference call following the earnings announcement, an investor asked Tesla how it sees competition in the Chinese market.

Tesla CEO Elon Musk said he has great respect for China's electric vehicle makers, saying they are smart and hard-working and anybody that's not as competitive as them will suffer a decline.

Musk said, however, that the best Chinese electric vehicle maker right now is actually Tesla China.

Tesla sold 78,906 China-made vehicles in June, surpassing last December's record high of 70,847, according to data released by the China Passenger Car Association (CPCA) on July 8.

Tesla China exported just 968 vehicles in June, according to the CPCA, meaning it delivered 77,938 vehicles locally, accounting for 98.77 percent of all sales in June.

Tesla Model Y retail sales in China in June were 52,150 units, up 348.7 percent from 11,623 units a year ago, making it the best-selling SUV in China in the month, according to the CPCA.

Tesla's Shanghai plant will reportedly finish upgrades around August 7 with significant capacity increases