(Yicai) Feb. 11 -- Tesla has launched production at its megafactory in Shanghai, its first plant to make Megapack energy storage batteries based outside of the United States, in which the US electric vehicle giant has invested over USD200 million.

The plant is located in the Lingang Special Area of Shanghai's free trade zone and went live today. It covers 20 hectares, with an initial annual production capacity of 10,000 units, equivalent to around 40 gigawatt-hours of energy storage.

The new Megapack plant is adjacent to Tesla's EV gigafactory, which became operational in 2019.

The plant will ramp up production this quarter, bolstering Tesla's expansion into the energy storage market, Mike Snyder, vice president of energy and charging businesses of the carmaker, said at a launch ceremony.

Tesla's energy business has grown rapidly, with global energy storage deployments reaching 31.4 GWh last year, Snyder noted. The company expects the figure to grow by at least 50 percent this year, alongside increased investments in energy storage infrastructure, he said.

The push into energy storage comes as Tesla's core EV business faces challenges. The carmaker's deliveries fell 1.1 percent to 1.8 million units last year from the prior one, its first annual sales drop in nearly a decade, according to an earnings report released on Jan. 29.

The drop in car sales impacted Tesla's financial performance, with its net profit plunging 52 percent to USD7.2 billion last year from 2023, while revenue climbed just 1 percent to USD97.7 billion. However, profit from its energy business soared 131 percent to USD2.6 billion on income surging 67 percent to USD10.1 billion.

Editor: Martin Kadiev