(Yicai) May 24 -- Tesla has started building its first megafactory in Shanghai, the first of its plants that make Megapack energy storage batteries to be based outside of the United States.

The US electric vehicle maker broke ground yesterday on the 20-hectare site in the Lingang Special Area, where its gigafactory is also located. The megafactory is likely to become operational and start delivering its first products by the end of this year.

It will produce 10,000 Megapacks a year, equal to about 40 gigawatt hours of energy storage, and will generate 40 million kilowatt-hours of electricity in an hour, similar in scale to the annual power used by 50,000 households.

“The plant will be a very important production and export base, just like Tesla's Shanghai gigafactory,” Tesla Vice President Tao Lin said at a ceremony to mark the start of construction. Some of the factory's products will be sold in China, with the rest exported worldwide, she said.

One reason why Tesla is building the new plant in Lingang is that the supply chain of new energy vehicles overlaps with that of energy storage equipment, noted Lu Yu, director of the high-tech department of the zone's management committee. 

Lingang has formed a sound industrial ecology with the rapid development of Tesla's gigafactory, Lu said, adding that the Megapack plant will significantly enhance the resilience of the new energy industry chain in the area, as well as its overall health and stability.

Lingang offers many scenarios for the application of Tesla's energy storage products on both the terminal and user sides, she noted. The successful implementation of local demonstration projects can help Tesla better promote its energy storage products in the global market, she said.

Also at the groundbreaking ceremony, Tesla and state-owned developer Lingang Group inked a procurement deal for the first batch of eight 32-megawatt-hour Megapacks.

The eight energy storage units will be used to provide a safer power supply to Lingang's smart computing center, Deng Haoqiang, deputy general manager of Shanghai Lingang Green Innovation Economic Development, told Yicai.

Tesla has sold Megapacks in more than 65 countries and regions, with a total installed capacity of 14.7 GWh last year. The figure hit a record high of 4.1 GWh in the first quarter, making it one of the firm's fastest-growing businesses.

Editors: Tang Shihua, Martin Kadiev