American auto giant Tesla wants to see a more significant increase in its car sales in China before it decides to build a factory in the country.

JB Straubel, Tesla's co-founder, explained that although China is currently Tesla's biggest market outside the United States, establishing a production facility only makes sense after when the market has already reached a "critical mass," China Daily reported.

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Straubel's announcement dampened rumors that plans were already underway to build a plant in the mainland.

The Tesla executive made the announcement during the International Transport Forum (ITF) 2016 summit in Leipzig, Germany.

It was Jon McNeill, Tesla's president of global sales, who first raised the possibility that Tesla was bent on constructing a factory in China in order to satisfy the fast-growing demand for its highly-popular Model 3 variant.

According to Ren Yuxiang, Tesla's head for Asia Pacific, the company's first mass-market car that was launched on April 1 had received the second highest preorders in China.

Ren however didn't disclose the exact number of orders.

Despite a reported slump in revenues, China remained Tesla's second largest market last year.

The ITF is an annual event of the  Organization for Economic Co-operation and Development (OECD), which has 57 member countries.

Over the years, China has taken the lead in organizing the summit of transport ministers.

This year's summit, which carried the theme of "green and inclusive transport," attracted over 1,000 policymakers as well as industry professionals from 71 countries.

Tesla's plan of building a factory in China might become a hot topic during the conference. 

TagsTesla, china, Tesla China Factory