Tesla displays a vehicle suspension at the center of its booth at the China International Consumer Products Expo in Haikou, South China's Hainan Province, on April 12, 2023.Photo: Xie Jun/GT

US electric car company Tesla set up a new-energy company in China, which focuses on areas such as technical services, artificial intelligence (AI) basic software development and energy storage technical services, according to reports on Friday, in the latest move of the firm's rapid expansion in the Chinese market. 

The new unit has a registered capital of $2 million, which is fully funded by Tesla's Hong Kong unit and its legal representative is Tesla executive Zhu Xiaotong, according to Chinese corporate information platform Tianyancha. The unit was set up on Thursday. 

The new unit will focus on a wide range of areas of business, including technical services, AI basic software development, solar power generation technology services, energy storage technology services, research and development (R&D) of motors and their control systems, and R&D of auto parts, according to Tianyancha. 

The move comes just days after Tesla and its CEO Elon Musk announced on Sunday that the firm would build a new factory in Shanghai to make large-scale batteries.  

"Our next Megafactory will be in Shanghai, [China] - capable of producing [10,000] Megapacks per year," Tesla said in a Tweet on Monday, which also included a picture of a signing ceremony in Shanghai. 

The new plant is scheduled to break ground in the third quarter of the year and start production in the second quarter of 2024, said the announcement the company sent to the Global Times on Sunday. Products made at the plant will be sold worldwide.

"Tesla [is] opening Megapack factory in Shanghai to supplement output of Megapack factory in California," Musk also tweeted on Monday. 

Megapack is a powerful battery that provides energy storage and support, helping to stabilize the grid and prevent outages, according to Tesla. The company already has a Megapack factory in the US state of California, which also produces 10,000 units each year.

It was unclear whether the new unit set up on Thursday was related to the construction of the new Megapack factory in Shanghai, but the firm is on a rapid expansion in the Chinese market on the heels of huge success of its Gigafactory in Shanghai, the largest outside the US which had an output of 710,000 vehicles in 2022. 

Tesla is not the only US firm that is expanding in China. On April 9, US chip giant Intel held an opening ceremony of setting up an office for its integrated circuit business in Sanya, South China's Hainan Province.

Following the grand opening of Pudong Costco, Shanghai's second one, in March, Costco, the US membership warehouse club, announced on Friday that its first store in East China's Zhejiang Province will be officially opened in Ningbo, in the second quarter of this year, in accelerating its business development in the Yangtze River Delta region in China.

Such expansions by US firms in China defy the so-called decoupling campaign pushed by some US politicians.

Global Times