Employees work at Tesla's Shanghai Gigafactory in east China's Shanghai, Dec. 22, 2023. (Xinhua/Fang Zhe)

U.S. carmaker Tesla has become the latest international company to double down on investment in China's new-energy sector.

The company on Thursday broke ground on a mega factory in Shanghai to manufacture its energy-storage batteries. This move demonstrates a strong vote of confidence in the world's major new-energy producing country despite the "decoupling" and "derisking" rhetoric hyped by some U.S. politicians.

In Shanghai, the electric car maker has already operated a gigafactory, which delivered 947,000 vehicles in 2023, an increase of 33 percent from the previous year.

Experts said China's fast-growing green technologies and its thriving new-energy market have heightened the country's magnetism for foreign investors, particularly auto firms keen on turbocharging the electrification trend.

Last month, BMW announced an additional investment of 20 billion yuan (about 2.8 billion U.S. dollars) in its production base in Shenyang to facilitate the production of its Neue Klasse EV-only lineup.

The latest funding initiative signals the company's "strong commitment to the Chinese market" and shows a "sign of confidence in future prospects," according to the German auto giant.

Also in April, Volkswagen Group announced an investment of 2.5 billion euros (about 2.68 billion U.S. dollars) in the expansion of its innovation hub in Hefei, the capital of east China's Anhui Province, to increase its pace of innovation in China.

The investment will be used to step up innovation and accelerate the production of two Volkswagen-brand smart electric vehicles, which are under joint development with Chinese manufacturer Xpeng.

More than 30 all-electric models of all its brands will be on offer in China alone by 2030, according to the German carmaker.

"We are fully committed to China. A strong position in China is equal to a strong position in the global automotive market," Volkswagen Group CEO Oliver Blume said, adding that no other region in the world has seen the transformation of the automotive industry as fast-paced as in China.

Both BMW and Volkswagen have logged robust sales of new-energy vehicles (NEVs) in China.

In 2023, BMW delivered nearly 100,000 electric vehicles in China, up more than 138 percent year on year. Volkswagen delivered approximately 191,800 electric vehicles to the Chinese market in 2023, a year-on-year increase of 23.2 percent.

China is the world's largest producer and market for NEV. In 2023, production and sales of NEV in China exceeded 9.58 million and 9.49 million units, surging 35.8 percent and 37.9 percent year on year, respectively, data from the China Association of Automobile Manufacturers showed.

"The influx of investments by international carmakers has shed light on the global competitiveness of China's NEV sector, which has formed complete industrial and supply chains in recent years," said Sun Lijian, professor with Fudan University.

China's new-energy sector has benefited from its technological prowess, complete industrial chain and a huge consumption market, said Li Gang, head of the automobile and traffic engineering college of Liaoning University of Technology.

"China, like many other countries, has introduced policies to address global warming and energy shortages, which have helped nurture a broad market and huge growth space for the new energy industry," Li said.