Tesla’s building a new “Megafactory” in Shanghai, the automaker announced yesterday at a signing ceremony. The facility will be designed to manufacture Tesla’s commercial Megapack battery energy storage units, with the goal of eventually producing about 10,000 systems per year, according to the automaker.

Tesla currently produces its Megapack energy storage units at its Gigafactory in Nevada, where it also makes battery packs for Tesla vehicles and Tesla Energy products like the Powerwall battery. Unlike the Powerwall, which is largely designed for residential battery backup and pairs with Tesla’s solar energy offerings, the Megapack is designed for major commercial projects.

The company is in the process of moving Megapack production to its new dedicated Megafactory location in Northern California. The Lathrop, California, facility, not too far from Tesla’s Fremont factory where it builds cars, will be the company’s first Megafactory. The location was in the planning stages in 2019, broke ground in 2021, and seemed to be an active site in December. It’s slated to handle 40GWh production per year.

Last week, Tesla posted a video showcasing a new solar energy station in Monterey Country, California — featuring 240MWh of Megapack battery storage and 280MW of solar production, or enough to power 100,000 homes per year. The location is known as the Cal Flats solar facility, and Apple reportedly will also be using energy produced here.

Shanghai is becoming a serious hub for Tesla manufacturing in China. One of the automaker’s five (soon six) Gigafactories is there and produces Tesla vehicles for sale in the country and elsewhere. With the new Megafactory, Tesla will be able to build more Megapack energy storage units for various utility and renewable energy projects locally and worldwide — like the 100MWh energy storage facility in Belgium that reportedly is the largest of its kind in Europe.

The move follows Tesla’s — and CEO Elon Musk’s — goal of building “a sustainable energy civilization.” Tesla hosted its Investor Day last month to invite funders to be “an investor in Earth.” The company estimates the world would need about 240TWh of energy storage capacity to become fully sustainable.