The factory, now just an expanse of muddy fields about two hours from Shanghai, will produce affordable versions of Tesla's Model 3 and Model Y for Greater China, he said during the visit, which took place on a cold, rainy day.
Domestic production would help shield Tesla against import duties as the US and China find ways to wriggle out of the tariff quandary.
The so-called Gigafactory is China's first wholly foreign-owned auto plant, a reflection of China's broader shift to open up its vehicle market, even amid a trade war with the United States which has seen a rise in tariffs on cars imported from the U.S.
Tesla broke ground on its first factory outside the USA on Monday with a facility in Shanghai.
Tesla has opened a tender process to build a $2 billion plant in Shanghai - dubbed a Gigafactory - and at least one contractor has started buying materials, Reuters reported earlier last month.
China is the largest market for electric vehicles, and most forecasters predict EV sales in the country will accelerate rapidly as government regulation drives toward a goal of 100 per cent electric vehicles by 2030.
Gigafactory 3 was expected to produce around 3,000 Model 3 vehicles a week in the initial phase, ramping up to 500,000 vehicles per year when it became fully operational, Tesla said in a statement.
Tesla boss Elon Musk said the electric car-maker would break ground Monday on a Shanghai factory that will allow it to sell to Chinese consumers and avoid tariffs from the China-US trade war.
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But the drop in the sales isn't just a direct effect of the trade war, which is why Monday's groundbreaking comes at an uncertain time.
Despite its relative affordability compared to other Tesla models, the price of a US-made Model 3 now starts at about $50,000, but Musk has said he aims to get that down to $35,000.
"Aiming to finish initial construction this summer, start Model 3 production end of the year & reach high-volume production next year".
The first of the new electric models being developed by global automakers to hit the market, Nissan's Sylphy Zero Emission, began rolling off a production line in southern China in August.
China typically requires foreign automakers to forge joint ventures with domestic firms when establishing manufacturing plants, which means sharing profits and technology with local partners.
China has raised import duties on US-made cars as part of the broader trade fight with the US.
But Tesla has said its Shanghai plant will be "wholly-owned" by the company.