Automative company, Tesla is ready to double down on its investment in China with the plan to open a Megapack battery factory in in Lingang, Shanghai.
Tesla revealed this development on Sunday, despite the political tension rising between Beijing and Washington.
With officials publicly rolling out the welcome wagon for foreign investors, the news was announced just days after Airbus unveiled plans for a second final-assembly line in the country’s north.
The company said in a tweet, the Tesla factory will be able to produce 10,000 Megapacks, which are very large batteries used to store huge amounts of electricity.
It announced the new factory with a picture of a signing ceremony in China.
Elon Musk said on Twitter, “Tesla opening Megapack factory in Shanghai to supplement output of Megapack factory in California.”
The has company said, megapacks are meant to be used as massive batteries to help stabilize energy grids. Each unit can store enough energy to power an average of 3,600 homes for one hour.
They are designed for utilities and large-scale commercial projects, not vehicles.
Sources have revealed that Chinese state media outlet Xinhua was the first to report the news, saying the electric automaker will break ground in this year’s third quarter and begin production in the second quarter of 2024.
The Shanghai facility would have the same level of production capacity as Tesla’s Megafactory in Lathrop, California — equivalent to 40 gigawatt-hours of energy storage.
An analyst at Wedbush Securities, Daniel Ives said, “We believe this announcement is a potential game changer for Tesla on the battery front,”
“In this EV [electric vehicle] arms race Tesla is further building its lead in battery technology with the new Megapack factory in China another flex the muscle moment for Musk.”
Sources say the place is an enormous free trade zone on the outskirts of Shanghai, where Tesla’s electric-vehicle Gigafactory broke ground in 2019. The facility was built within 10 months, at 65% of the cost of the Model 3 production plant in the United States.