Tesla has announced plans to build a factory in Shanghai to produce its Megapack energy storage system, as chief executive Elon Musk resists a rising tide of angst in Washington over US technology companies investing in China.The electric-vehicle maker said at a signing ceremony in the Chinese city that construction of its new plant was planned for the third quarter of this year, with production scheduled to begin in the second quarter of 2024.

Tesla expects the factory to produce about 10,000 Megapack units a year — equivalent to about 40 gigawatt hours of energy storage — reflecting Musk’s decision to deepen engagement with China just as his Tesla cars struggle to fend off growing competition from Chinese rivals.

The billionaire’s decision to expand his company’s manufacturing presence in Shanghai takes place as the US is expected to soon release for trial a new investment screening mechanism to China. The requirement would be one strand in a broad-based set of new policies under President Joe Biden aimed at cutting US reliance on China for manufacturing and technology and boosting American manufacturing.