Tesla, Inc. TSLA will reportedly have one second plant in China.

What happened: Tesla will set up a new mega-factory in Shanghai to manufacture Megapack, Tesla’s energy storage product, the US electric vehicle maker announced at the project’s signing ceremony in China’s largest city, Chinese state media company Xinhua reported.

Construction of the new plant is scheduled to begin in the third quarter, with production scheduled to begin in the second half of 2024.

According to Xinhua, the annual capacity of the planned facility will be 10,000 megapack units, equivalent to about 40 gigawatt-hours of energy storage. Tesla expects to sell these mega packs worldwide, the publication further states.

See also: Everything you need to know about Tesla stock

Why it matters: Tesla’s current Giga-Factory in Shanghai makes both Model Y and Model 3 vehicles and accounts for just over half of the company’s global production.

Rumors about a new facility next to the existing one floated around in early 2022, with Reuters reporting that the plan had been confirmed by Tesla’s CEO Elon Musk Ina letter to the local officials. At the time, the company reportedly had plans to use the new plant to increase its vehicle production capacity in China.

According to Tesla, the company’s Megapack is “a powerful battery that stores and supports energy [to help] stabilize the grid and prevent outages.” Each unit can store 3 megawatt hours of energy, enough to power an average of 3,600 homes for an hour, the EV maker noted.

The report from the Megapack plant comes on the heels of news that Musk will visit next door in China on Saturday tom zhu, the Tesla China executive who was recently appointed senior vice president of automotive operations. Musk will reportedly stop by the Giga-Factory in Shanghai and meet with local authorities in Shanghai.

Tesla closed Thursday’s session down 0.25% at $185.06 Benzinga Pro data.

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