Tesla has begun trial production at its new Shanghai megafactory, which is dedicated to manufacturing Megapack energy storage batteries. The mass production is expected to start in the first quarter of 2025 – less than a year since construction started.

The new megafactory is located near Tesla’s existing vehicle gigafactory in the Lingang area and marks the company’s first energy storage plant outside the US. The groundbreaking ceremony occurred on May 23, and the construction was completed in seven months, Tesla China told the state-owned Xinhua agency on Tuesday.

The plant construction set a new record of “Tesla speed” in China, as Tesla’s first Shanghai plant was built within a year in 2019, Xinhua notes.

Tesla’s stationary energy storage products include the Powerwall, Powerpack, and Megapack. The second Tesla factory in China will mainly manufacture Megapacks for the domestic market and export.

The factory is designed to produce 10,000 Megapack units annually, equivalent to around 40 GWh of energy storage capacity. According to Tesla, each Megapack can store more than 3 MWh of energy, sufficient to power approximately 3,600 homes for an hour. Megapacks will use lithium iron phosphate batteries (LFP).

Tesla signed its first Megapack orders with the Shanghai Lingang Economic Development Group. According to local authorities, the new megafactory, which spans 200,000 square meters, represents an investment of approximately 1.45 billion yuan (202 million USD).

The project is Tesla’s second major facility in Shanghai, following the construction of its Gigafactory in 2019. Tesla China’s main Megapack battery cell supplier is CATL, but the company has diversified its supply chain. In June, it partnered with FinDreams, a battery manufacturing unit of BYD, to supply battery cells for the Megapacks starting in the first quarter of 2025, local media reported.