Tesla has announced the opening of a new Megafactory in Shanghai, China, which will be capable of producing 10,000 Megapacks per year, reports CNBC. A Megapack is a large battery that stores energy that can be used to stabilize the power grid and prevent outages.

Batteries also allow grid operators to move additional capacity between different regions and can store energy from intermittent sources, such as wind and solar farms, for use during periods of high demand or unplanned outages.

Tesla’s current Megafactory in Lathrop, California, can produce 10,000 Megapacks each year, according to the company’s website. Tesla CEO Elon Musk confirmed on Twitter that the new factory in China will complement the production of the California plant.

Construction of the plant in China is expected to begin in the third quarter of this year, with production expected to begin around the second half of 2024. According to Chinese state media Xinhua, the announcement was made during a signing ceremony in Shanghai, but neither Tesla nor Musk have yet commented.

The deepening of Tesla’s cooperation with China is taking place against the background of the growing confrontation between the People’s Republic of China and the United States.

China’s naval forces have encircled Taiwan during ‘military drills’, clearly hinting at the possibility of a forceful takeover of the island the US has pledged to defend.