Tesla, Elon Musk’s electric car company, says it is expanding in China by building a new factory to produce large-scale batteries.

According to the company, the Shanghai plant will be able to produce 10,000 of its “Megapack” energy storage units per year.

A Megapack is a large battery that can help stabilize energy grids and prevent power outages.

Tesla already has a Megapack plant in California that produces 10,000 units per year.

Mr Musk stated on Twitter that the new Chinese plant will be in addition to Tesla’s existing US facility.

According to Chinese state media outlet Xinhua, construction on the new Megapack plant in China is expected to begin later this year, with battery production set to begin in the summer of 2024.

Tesla did not immediately respond to a request for comment from the BBC.

China is the world’s largest producer of batteries, which Tesla will be able to use to boost production and reduce costs.

The announcement comes as the US government is pressuring American companies to become less reliant on China as tensions between Beijing and Washington rise.

The Biden administration banned US technology firms that receive federal funding from building “advanced technology” facilities in China for ten years last year.

The guidelines were part of a $50 billion (£40 billion) plan to expand the US semiconductor industry.

Mr. Biden signed legislation in August committing $280 billion to high-tech manufacturing and scientific research, amid concerns that the United States is losing its technological edge to China.

Tesla opened its first factory outside the United States in Shanghai in 2019. Currently, the plant produces 22,000 vehicles per week.

Tesla also manufactures vehicles near Berlin, Germany, and has announced plans for a new overseas plant in Monterrey, Mexico.