China is proving crucial to Elon Musk's ambition in terms of electric vehicles, and the latest proof is this: over half of Tesla's global sales last year were made at its two-year-old plant in Shanghai.

Over 484,000 Model 3 sedans and Model Y SUVs rolled off the facility's assembly line in 2021, accounting for 51.7 percent of Tesla's global deliveries of 936,000 units during the year, according to the China Passenger Car Association.

The Shanghai plant, which started production in late 2019, is Tesla's first car manufacturing facility outside the United States and China's first and only passenger car manufacturing facility wholly owned by an overseas carmaker.

Tesla has made the plant its major export hub. Last year, it shipped over 160,000 vehicles into more than 10 countries, the majority of which were Model 3 sedans.

The carmaker is seeing its popularity hit a record high in China as well. In December, over 70,000 Tesla vehicles were sold in the country, 34 percent higher than the November figure.

They brought Tesla's China deliveries to over 320,000 units in 2021, which were one-third of the carmaker's global sales, according to the CPCA.

China has the world's largest new energy vehicle market, with 3.5 million units sold in 2021, but it is dominated by domestic brands such as BYD and Wuling. The latter rose to fame because of its affordable electric two-seaters.

Tesla ranked third after the two last year and was one of two foreign brands in the top 10 in terms of sales, with the other one being Volkswagen, which delivered 70,000 units.

Cui Dongshu, secretary-general of the CPCA, said Tesla will gain more ground as new energy vehicles are rising as new serious choices for the general public in China.

The association expects sales of electric and plug-in hybrid passenger vehicles in China to reach 5.5 million units in 2022, roughly 25 percent of all passenger vehicles sold in the year.

International carmakers including Tesla would like to tap into the growth potential by ramping up indigenous research and development.

Tesla unveiled a research facility late last year in Shanghai. It said the facility, its first outside the US, will gradually develop over time to be similar in size to the one in its home country.

"The goal of Tesla's team in China is to design, develop and produce new vehicle models and products with Chinese elements and sell them globally," Tesla said in an online recruitment post last year.