Ningxia Shenzhou Tire Co. Ltd. has broken ground on Phase II of its new tire plant in the Chinese city of Shizuishan, Tyres & Accessories reports.

The second phase of the $1.65 billion project is expected to produce production capacity for tires for high-end markets in Europe and the U.S.

Shenzhou Tire’s goal is to produce 10 million all-steel radial tires, 10 million of semi-steel radial tires, and 100,000 aviation tires at the plant.

Phase one began in June 2013 and the plant’s first production line was operational in May 2015. Phase I produced 2.6 million tires a year of radial truck tire capacity, according to Shenzhou Tire.

The plant’s construction is expected to begin at the end of 2016 and go into operation in 2017. Local media reports the plant will create about 2,000 jobs and generate almost $950 million annually.

T&A reports that there is talk of a Phase III that could be constructed outside of China to avoid the U.S. import tariffs. The third phase would reportedly bring an additional 2.4 million units of truck radial capacity, 10 million units of passenger tires and 100,000 units of aircraft tires annually.