(Yicai) May 14 -- Tesla has received a permit to build a Megapack energy storage battery plant near its electric vehicle gigafactory in Shanghai, the carmaker's first such megafactory project outside the United States.

Tesla will invest around CNY1.5 billion (USD200 million) in the new megafactory, which will be located in the Lingang Special Area and cover an area of about 20 hectares, the special economic space's administration said on WeCha yesterday. The firm plans to start construction this month and achieve mass production in the first quarter of next year, it added.

The plant will produce 10,000 Megapacks a year, equal to about 40 gigawatt hours of energy storage, Tesla said in April last year. The amount is equivalent to one-third of China's energy storage lithium-ion battery shipments in 2022, according to data from the Gaogong Industry Research Institute. 

The factory will make Megapacks to help grid operators and utility companies store and distribute renewable energy more efficiently. More than 200 Megapacks can form an energy storage power plant, storing 1 million kilowatt hours of electricity.

Tesla inked a deal with Lingang New Area to build the megafactory there on April 9 last year, while the pair signed a land acquisition agreement last December.

Megapacks use renewable energy to supplement and ensure local electricity supply in many areas of North America, Asia-Pacific regions, and Europe.

China has built and put into operation new energy storage projects of 31.39 million kW/66.87 million kWh as of the end of last year, with an average storage duration of 2.1 hours, according to the National Energy Administration. It installed a capacity of about 22.6 million kW/48.7 million kWh last year, up nearly 300 percent from the end of 2022.

Editor: Martin Kadiev