Tesla Is Building a New Factory in Shanghai to Make More Megapack Batteries

Rachel Cormack
·2 min read

Tesla is bolstering its presence in China’s biggest city.

The EV maker is opening a new Megafactory in Shanghai, according to a company tweet shared on Sunday. The new site will reportedly be capable of producing 10,000 Megapack batteries per year to supplement the output of the factory in California.

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To recap, the Megapack (pictured above) can safely store energy for the grid thus eliminating the need for gas peaker plants and helping to avoid outages. Each battery can hold more than 3 MWh of energy—or about enough juice to power an average of 3,600 homes for one hour.

Tesla will break ground on the plant in the third quarter and start production in the second quarter of 2024, as reported by Reuters. The marque already has a giant Gigafactory in Shangai that produces Model 3 and Model Y cars, as well as sizable outposts in Berlin, Nevada, New York, and, of course, California. It is also planning a $775 million expansion of its manufacturing hub and global headquarters in Austin, Tex.

The news comes just one month after Tesla CEO Elon Musk announced the marque has mapped out a way to slash the price of its next generation of vehicles in half. The manufacturer will use innovative manufacturing techniques and smaller factories to cut the cost of new-gen cars to $25,000, Musk explained during an investor day live stream in Austin, Tex., last March. Tesla generates most of its money from its electric cars, but Musk has committed to growing its solar energy and battery businesses to roughly the same size.

With the new Shanghai plant, Tesla will be able to capitalize on China’s world-leading battery supply chain to ramp up production of the Megapack while lowering the cost of the unit. In turn, it will help meet the rising demand for energy storage globally. (As the world shifts toward renewable energy, the need for effective storage solutions has also increased.) It seems the most recent expansion is all a part of Tesla’s master plan. The marque published a new paper last Wednesday titled Master Plan Part 3, which outlines a proposed path to generate sustainable energy for the entire Earth.

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