Tesla's Shanghai factory, which went into operation at the end of 2019, is the first wholly foreign-owned automotive manufacturing project in China.

Tesla's (NASDAQ: TSLA) Shanghai factory saw the 1 millionth Model Y production vehicle roll off the line, marking the latest milestone for the US electric vehicle (EV) maker's largest factory in the world.

Several local automotive media outlets reported on the milestone today, sharing an image showing workers at Tesla's Shanghai factory celebrating the moment around a red Model Y. Tesla has yet to share the development on its social media channels.

Tesla's Shanghai factory, which started construction on January 7, 2019, and began operations at the end of 2019, is the first wholly foreign-owned automotive manufacturing project in China.

Giga Shanghai began delivering Model 3 sedans in January 2020 and Model Y crossovers in January 2021 to local consumers.

The plant saw its one-millionth mass-produced vehicle roll off the assembly line on August 13, 2022, less than three years after the plant began production.

The factory, which now has a capacity of more than 1 million vehicles per year, is Tesla's largest in the world and not only supplies vehicles to customers in China, but also serves as an export center for the EV maker.

Tesla delivered a record 466,140 vehicles globally in the second quarter, up 83.02 percent year-on-year and up 10.23 percent from 422,875 in the first quarter, data it released on July 2 showed.

In the second quarter, Tesla sold 247,217 China-made vehicles, contributing 53 percent of global deliveries, CnEVPost's tracking showed.

In China, where consumers generally favor more spacious crossovers, the locally produced Model Y has quickly surpassed the Model 3 in sales and become one of China's best-selling SUVs since deliveries began in China in January 2021.

With 31,054 units sold at retail in China in May, the Model Y was the best-selling SUV in the country, ahead of the second-place BYD Yuan Plus at 26,072 units and the third-place BYD Song Plus at 22,079 units, according to a ranking by the China Passenger Car Association (CPCA).

From January to May, Model Y retail sales in China were 152,461 units, up 87.03 percent year-on-year, making it the best-selling SUV in the country during that period.

In June, Tesla sold 93,680 China-made vehicles, including 19,468 exported and 74,212 delivered in China, according to data released by the CPCA on July 10. A breakdown of deliveries of the Model 3 and Model Y in China is not yet available.

On March 1, Reuters reported that Tesla was working to retool its Shanghai assembly plant for a revamped version of the Model 3, codenamed Highland by Tesla, which is expected to go into production in Shanghai in September.

In addition to the Highland version of Model 3, the previous Reuters report mentioned that Tesla was preparing production modifications to the Model Y.

The changes to the Model Y -- which Tesla has codenamed Project Juniper -- involve the exterior and interior of the SUV, with production targeted to begin in 2024, according to the report.

On July 7, local media outlet Jiemian reported that Tesla's Shanghai factory was close to completing production line tuning of the updated Model 3, with prototypes tested on the factory's roads over weekends.

Automakers' share in China NEV market in Jun: BYD 34.7%, Tesla 11.2%