The automaker is the sole bidder on the plot of land, and the Shanghai government could award the deal to Tesla as soon as this month, the report said. Tesla intends to build a factory there capable of making 500,000 cars a year.
The move is the latest in Tesla's plan to boost production in the world's largest car market, which is known for favoring locally made vehicles over imports. Unlike many foreign automakers, Tesla has no joint partnerships with Chinese companies and no production currently in the country.
In its ongoing trade war with the United States, China has imposed a total 40 percent tariff rate on Tesla vehicles. Including the costs of shipping, Tesla is operating at a 55 to 60 percent cost disadvantage compared with Chinese-made cars, the company said in early October.
Tesla said it plans to raise most of the money it needs to build the factory through Chinese banks.
Tesla declined to comment on the report.
Read the full story in Bloomberg.