Shanghai (ZXZC)- U.S. electric vehicle (EV) manufacturer Tesla Inc. announced on Sunday it will build a new mega factory in Shanghai, which will focus on manufacturing the company’s energy storage product Megapack.

The new factory is scheduled to break ground in the third quarter of this year and start production in the second quarter next year, aiming to radiate its supply capability worldwide, Tesla said at the project’s signing ceremony on Apr. 9.

Photo credit: Tesla

The new mega factory features a production capacity of 10,000 Megapack units per year at its initial operation stage, amounting to roughly 40 GWh of energy storage. 

Megapack is a powerful battery that provides energy storage and support, helping to stabilize the grid and prevent outages. According to the introduction from Tesla’s official website, Megapack stores energy for the grid reliably and safely, eliminating the need for gas peaker plants and helping to avoid outages. Each unit can store over 3 MWh of energy—that's enough energy to power an average of 3,600 homes for one hour.

Each Megapack unit ships fully assembled and ready to operate, allowing for quick installation timelines and reduced complexity, said the automaker.

In addition, Megapack delivers more power and reliability at a lower cost across its lifetime as each battery module is paired with its own inverter. It is also available for over-the-air software updates.

Tesla enumerated several cases that the Megapack has been successfully put into practical use. For instance, in Soldotna, Alaska, the U.S., Homer Electric installed a 37-unit, 46 MW Megapack system to lift renewable energy capacity along Alaska’s rural Kenai Peninsula, reducing reliance on gas turbines and helping to prevent outages. In Australia, the Victoria Big Battery—a 212-unit, 350 MW system—is one of the largest renewable energy storage parks in the world, providing backup protection to Victoria.