Tesla to build Megapack battery factory in Shanghai
Tesla Inc. will build a new battery factory in Shanghai, boosting investment in China at a time of rising tensions between Beijing and Washington.
Tesla will produce large-capacity Megapack batteries at the new plant, which will complement its electric vehicle factory in Shanghai. The start of the project was announced this week at a contract signing in Shanghai. The event was attended by Tom Zhu, Tesla’s senior vice president of automotive, and Shanghai government officials including Vice Mayor Wu Qing, with the contract signed by Tesla Vice President Tao Lin.
Construction is expected to begin in the third quarter of this year and the plant will start production in the second quarter of 2024, the company said in a statement.
Tesla’s deepening investment in China comes shortly after France’s Airbus SE announced plans to double production capacity in the country for one of its best-selling planes. Under the agreement, signed Thursday in Beijing by Chief Executive Officer Guillaume Faury, the European plane maker will add a second final assembly line for narrow-body A320s at its existing factory in Tianjin.
The new manufacturing projects are a boost for Chinese industry as other companies such as Apple Inc. reassess production in the country amid heightened tensions in relations with the U.S. over everything from the alleged downing of a Chinese spy balloon over U.S. skies to Beijing’s partnership with Russian President Vladimir Putin.
The megapack is intended as a massive battery to help stabilize power grids, with the company saying each unit can store enough energy to power an average of 3,600 homes for one hour. The new factory will initially produce 10,000 Megapacks per year, equivalent to approximately 40 GWh of energy, and the products will be sold worldwide. China, which is home to the world’s rising electric car star, BYD Co, is an extremely important market for Tesla. Its existing car plant on the outskirts of Shanghai produced nearly 711,000 vehicles last year, accounting for 52% of global production.
Musk said in January that China is the most competitive automotive market. He has made similar comments before, including in September 2021, when he said he had “great respect for many Chinese car companies”.
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