In a move that underscores its commitment to the Chinese market, U.S. electric vehicle giant Tesla broke ground on a new mega factory in Shanghai on Thursday. The facility, which will manufacture the company’s energy-storage Megapacks, is Tesla’s first such plant outside the United States.
The new plant, spanning an area of approximately 200,000 square meters, represents a total investment of around 1.45 billion yuan (about $203.94 million). It is the company’s second manufacturing site in Shanghai, following the inauguration of its electric vehicle gigafactory in 2019.
“I believe the new plant is a milestone for both Shanghai and Tesla,” said Tao Lin, the company’s vice president, in an exclusive interview with Xinhua. “In a more open environment, we can create a new Tesla speed at the Megapack factory, and supply the global market with large-scale energy-storage batteries manufactured in China.”
The Megapack factory is expected to begin mass production in the first quarter of 2025, with an initial capacity of 10,000 units per year. Each Megapack unit can store over 3.9 megawatt-hours of energy, enough to power approximately 3,600 households for one hour.
“With Tesla’s benchmark project, we anticipate that within the next three to five years, an industrial cluster centered around energy storage will rapidly emerge,” said Lu Yu, an official from the Lin-gang Special Area Administration, where the new plant is located.
The groundbreaking ceremony was attended by Tesla representatives and local government officials, who formally initiated the construction of the new facility. Following the event, Tesla signed a deal with Shanghai Lingang Economic Development (Group) Co., Ltd., securing the first batch of Megapack orders in China.
Gong Wei, vice president of Lingang Group, said the Megapacks would be used for energy storage in a data center in the Lin-gang Special Area, as part of the group’s efforts to achieve carbon peaking and carbon neutrality.
Tesla’s deep involvement in the energy storage industry now rivals its electric vehicles in importance, according to Tao. The company already has a Megapack factory in California, with an annual capacity of 10,000 units.
The latest move in Shanghai underscores Tesla’s commitment to investing in China, defying the rhetoric of “decoupling” and “de-risking” from the world’s second-largest economy that has been ratcheted up by some U.S. politicians.
