This photo taken on Dec. 22, 2023 shows Megapack units at Tesla's Shanghai Gigafactory in east China's Shanghai. (Xinhua/Fang Zhe)

Tesla broke ground on a mega factory in Shanghai on Thursday to manufacture its energy-storage batteries known as Megapacks, a project hailed as a "milestone" by the U.S. carmaker.

The latest move underscores Tesla's commitment to investing in the world's second-largest economy, defying the rhetoric of "decoupling" and "de-risking" from China promoted by some U.S. politicians.

The new plant spans an area of approximately 200,000 square meters, with a total investment of around 1.45 billion yuan (about 203.94 million U.S. dollars), according to the administration of Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone.

The mega factory is the first of its kind built by Tesla outside the United States and the company's second plant in Shanghai, following the inauguration of its gigafactory in 2019 which involved an initial investment of over 50 billion yuan.

"I believe the new plant is a milestone for both Shanghai and Tesla," the company's vice president Tao Lin told Xinhua in an exclusive interview.

"In a more open environment, we can create a new Tesla speed at the Megapack factory, and supply the global market with large-scale energy-storage batteries manufactured in China," she added.