While Tesla has thus far only built power storage devices in the US, the new plant in China aims to open up further global markets for stationary large storage solutions.

Construction of the plant is expected to start in Q3 2023, with production scheduled to begin in Q2 2024.

Tesla's Megapack, a powerful battery that stores and delivers energy to help stabilize the power grid and prevent blackouts, will be produced at the new Megafactory.

According to Cnevpost, a Megapack currently costs at least just under $1.9 million in the US, with delivery planned for Q1 2025.

Each Megapack unit can store more than 3 MWh of energy, enough to power 3,600 homes for an hour, according to Tesla's website.

The signing ceremony for the new Megafactory was attended by high-ranking officials from Tesla's authorities, as well as representatives Tom Zhu, newly appointed senior vice president of automotive business, and Grace Tao, vice president of external affairs.

The Tesla Gigafactory, the world's largest, has been in operation since 2019 and is also located in Shanghai's Lingang special zone.

The new Megafactory is expected to strengthen Tesla's presence in the Asian markets.

"Today we witness the signing of the Tesla Megafactory project, which will play an important role in promoting the development of Shanghai's new energy storage industry and the green, low-carbon transformation," said Zhuang Mudi, Deputy Secretary-General of the Shanghai Municipal Government.