Elon Musk’s Tesla is planning to expand its operations in communist China with the development of a new Megapack battery factory that aims to produce 10,000 units annually for worldwide sales.

The Wall Street Journal reports that despite growing geopolitical tensions between the U.S. and China, Tesla has announced plans to build a factory in Shanghai to produce its Megapack battery, further increasing its presence in the country. The production of large-capacity batteries for energy storage will be the main goal of the new factory.

According to Chinese state media Xinhua News Agency, the factory is expected to break ground in the third quarter of 2023 and begin production in the second quarter of 2024. The exact amount of Elon Musk’s investment is still unknown. Tesla announced plans to produce 10,000 Megapack units annually and shared a picture of a signing ceremony on Twitter. These products will be sold all over the world and have a total storage capacity of about 40 gigawatt-hours (GWh).

“A Megapack unit can store enough energy to power an average of 3,600 homes for one hour,” stated Tesla on its website. The decision to grow in China was made in the midst of rising geopolitical hostilities between Washington and Beijing as well as unrest in the Chinese economy. In spite of these worries, Musk already runs a car factory in Shanghai, which produces nearly half of all the cars the company sells globally. China is the second-largest market for Musk’s cars, accounting for nearly a quarter of its revenue in 2022.

“Tesla’s expansion in China demonstrates our commitment to the market and our belief in its potential for sustainable energy solutions,” said Elon Musk.

Due to the pandemic and Covid-19 infections among employees and suppliers, Tesla’s Shanghai factory has had to suspend production on multiple occasions. Additionally, domestic producers of electric vehicles like BYD Co., NIO Inc., and XPeng Inc. present the company with fierce competition. Tesla has implemented price reductions and provided incentives to Chinese buyers in response to these difficulties.

Tesla already runs a Megapack facility in Lathrop, California, and has plans to boost output there. Elon Musk claimed in a tweet that Tesla’s commitment to clean energy solutions around the world would be furthered by the addition of the Shanghai factory to the output of the California Megapack facility. Megapack batteries can be used for utility-scale power storage, including long-term solar and wind energy storage. In 2022, energy generation and storage accounted for approximately five percent of Tesla’s revenue.

Read more at the Wall Street Journal here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan