In order to make its Megapack batteries, Tesla will build a new factory in Shanghai, according to official Chinese media on Sunday.
The factory would reportedly “start production in the second quarter of 2024” and have a 10,000 Megapack unit yearly capacity at first, according to Xinhua News Agency.
The US-based electric car maker asserts that their Megapacks, each of which has a capacity of more than three megawatt-hours, are intended to store energy and stabilise the supply for power networks.
It will be Tesla’s second factory in the Chinese city after the enormous Shanghai Gigafactory, where vehicle production of the Model 3 started in 2019. 20,000 automobiles are currently produced per week in China.
Local official Lu Yu reportedly forecasted that the new battery plant will result in a “industrial cluster” worth more than $14 billion, according to Xinhua.
Before the announcement, Tesla CEO Elon Musk had previously provided investors with a general but aggressive growth acceleration goal.
Despite years of losses, Tesla has stabilised and amassed a spectacular run of profits as it has increased production and constructed new facilities.
The factory’s construction is expected to begin in the third quarter of this year, according to local media sources.
As Tesla and the Lin-gang Special Area Administration inked a contract in Shanghai on Sunday, the state-run tabloid China Daily reported that plans for the new factory had been unveiled.
The story went on to say that Tesla, a US manufacturer of electric vehicles, would keep making investments in China through “a broader range of products and services.”
In the Asian market, more than 5.9 million electric vehicles have been sold, with 2.4 million of those sales occurring in only the first half. With a 26% market share, Europe was the second-largest market last year, with the US accounting for 9% of global sales.
The latest Tesla deal in Shanghai was cited in a piece by state-run Chinese media, the Global Times, as another example of US corporations’ “confidence” in making investments in China.
Moreover, Intel’s integrated circuits division recently launched a new location in Sanya, China’s Hainan province.
According to a statement from Intel, which was cited in the Global Times piece, the new website for the US chipmaker will manage “international commerce, technological services, and investment activities.”
