The Megapack factory that Tesla Inc. intends to construct in Shanghai will be able to produce 10,000 Megapacks annually.

According to Tesla, a Megapack is a “powerful battery that provides energy storage and support, helping to stabilize the grid and prevent outages.”

Elon Musk, CEO of Tesla, wrote that the plant will complement the company’s Megafactory in Lathrop, California.

“Tesla opening Megapack factory in Shanghai to supplement output of Megapack factory in California,” Musk wrote on Twitter.

The factory’s construction will start in the third quarter of 2023, and production is expected to begin in the second quarter of 2024.

According to Chinese state media outlet Xinhua, 10,000 Megapack units annually equal approximately 40 gigawatt hours of energy storage.

In order to boost output, the brand-new factory in Shanghai will make use of China’s leading battery supply chain. With increased production, Tesla’s Megapack battery products’ prices are also expected to fall, which will help meet global energy needs.

Additionally, Tesla has a Gigafactory in Shanghai that can produce 22,000 automobiles per week.

Even though the company planned to increase the factory’s annual capacity to 450,000 units in May, there has been less demand for electric vehicles (EVs) since then.

Despite China having the largest auto market in the world, EV sales growth slowed to 20.8% in the first months of 2023, a sharp decline from 150 percent in the same period in 2022.