U.S. carmaker Tesla Inc. announced Sunday that it will build a new factory in Shanghai dedicated to making the brand's energy storage product Megapack, the first such factory outside the U.S.
Tesla also built its first overseas gigafactory in Shanghai in 2019. The plant is now capable of producing 22,000 units of cars per week and exporting to Europe.
The new plant is scheduled to break ground in the third quarter of the year and start production in the second quarter of 2024, Tesla said at a signing ceremony of the project in Shanghai's Lin-gang Special Area.
Complementing a huge existing Shanghai plant making electric vehicles, the new factory will initially produce 10,000 Megapack units a year, equal to around 40-gigawatt hours of energy storage, to be sold globally.
Megapacks are Tesla's lithium-ion batteries, used for battery-storage power stations.
Tesla generates most of its money from its electric car business, but the company's CEO Elon Musk has committed to growing its solar energy and battery business to roughly the same size.
Zhuang Mudi, deputy secretary-general of the Shanghai Municipal Government, said the energy storage project "will surely become an important force to promote the development of Shanghai's new energy storage industry and the city's green and low-carbon transformation."
Calling the project another "benchmark" for Shanghai to actively stimulate foreign investment, Lin-gang Special Area authorities said that this further demonstrates Shanghai's "clear attitude" of increasingly attracting and utilizing foreign capital and continuously creating a market-oriented, legalized and internationalized business environment.