Tesla to Build a New Battery Manufacturing Facility in Shanghai

Electric vehicle maker Tesla said it will build a new gigafactory in Shanghai, exclusively focused on producing the firm’s energy storage product Megapack. The company announced the move publicly on Twitter.

Xinhua, the official state-run press agency of the People’s Republic of China, reported that the company’s new facility will commence construction in the third quarter of this year and begin manufacturing in the second quarter of next year.

The agency said Tesla disclosed the construction schedule at the signing ceremony for the project.

The plant will start by producing 10,000 units of Megapack annually, an equivalent of roughly 40 GWh of energy storage. These products will be available worldwide.

Tesla’s Megapack is a powerful battery that delivers energy storage and support, which aids in grid stabilization and prevents power failures.

The manufacturing facility will be situated in the Lin-gang Special Area within China (Shanghai) Pilot Free Trade Zone.

Citing an official from the Lin-gang Special Area Administration, Xinhua reported that Tesla’s new factory is expected to create an industrial cluster valued at over 100 billion yuan (~$14.5 billion).

Zhuang Mudi, the deputy secretary-general of the Shanghai municipal government, said the project will aid in advancing the development of the new energy-storage sector and promoting the green and low-carbon transformation of Shanghai.

In January 2019, Tesla initiated construction on its Shanghai gigafactory, taking advantage of a new policy that permits foreign car manufacturers to establish fully owned subsidiaries in China.

The Gigafactory in Shanghai is Tesla’s first facility of its kind, established outside the United States.

In 2022, the plant manufactured 710,000 vehicles, which marks a 48 percent rise from 2021. It has transformed into Tesla’s primary vehicle export center, with electric cars performing well in Asia-Pacific, Europe, and other parts of the world.

Tesla’s Vice President, Tao Lin, said that due to the favorable business environment in Shanghai and the Lin-gang Special Area, the Shanghai Gigafactory has a localization rate of over 95% in the industrial chain.

China has said that it was committed to share the advantages of an ultra-large consumer market with the world and to promote universal development.

Since 2019, Tesla has been increasing its investment in the Lin-gang Special Area, expanding the production capacity of its Shanghai gigafactory, and constructing more facilities, including a supercharger manufacturing factory.

A recent report by Wood Mackenzie said that Tesla Solar Roof achieved 2% of its weekly rooftop solar systems installation target last year due to increasing competition.

The company’s fourth-quarter profit was up 19% year-over-year, with solar and storage business revenues reported at $1.31 billion.


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