Xinhua Reports on Tesla's Shanghai Expansion
Chinese state media outlet Xinhua was the first to report the news detailing the signing ceremony in Shanghai for the new facility.
Shanghai Plant Timeline: Construction and Production
The electric automaker, led by Elon Musk, will begin construction in the third quarter of 2023 and start production by the second quarter of 2024.
Shanghai Factory to Boost Global Megapack Sales
The new factory, supplementing Tesla's massive Shanghai electric vehicle plant, will initially produce 10,000 Megapack units annually. This translates to around 40-gigawatt hours of energy storage for global sales.
Tesla Leverages China's Battery Supply Chain
With the Shanghai plant, Tesla (NASDAQ: TSLA) plans to utilize China's leading battery supply chain to increase output and reduce costs for its Megapack lithium-ion battery units. This will help meet the growing global demand for energy storage as renewable energy use increases.
Tesla's Commitment to Solar Energy and Battery Business
Though Tesla primarily generates revenue from its electric car business, Elon Musk has pledged to expand its solar energy and battery operations to a similar scale.
CATL's Collaboration with Tesla in Battery Supplies
Chinese battery giant CATL is strengthening its partnership with clients, including Tesla, in energy storage battery supplies. CATL Chairman Robin Zeng expects this market to surpass that of electric vehicle (EV) batteries.
Tesla's Current Megafactory in California
Tesla already operates a Megafactory in Lathrop, California, which also can manufacture 10,000 Megapacks per year.
Tesla's Shanghai Gigafactory Production
The company began producing Model 3 cars in Shanghai in 2019 and is currently capable of producing 22,000 units of cars per week.
Gigafactory Shanghai Expansion Plans
Last May, Tesla announced plans to expand its highly productive Gigafactory Shanghai with an added annual capacity of 450,000 units, as reported by Reuters.
Tesla Faces Inventory Challenges in Shanghai
However, the US company has struggled with rising inventory in Shanghai due to weakened demand in the third quarter, prompting aggressive price cuts in major markets worldwide in January.
EV Sales Growth Slows in China
Growth in electric vehicle sales in China, the world's largest auto market, has slowed to 20.8% in the first two months of 2023, down from 150% during the same period a year earlier.