Chinese Media Reports: Tesla’s megapack battery project in Shanghai has been launched

Tesla (TSLA.O) on Friday launched its new megapack battery manufacturing plant in Shanghai with a ceremony for the purchase of the land for the project, Chinese state media reported.

The project can produce 10,000 megapacks annually, and the event took place in Shanghai, Xinhua said.

Tesla did not comment immediately. The article said construction on the powerful battery facility will begin in the first quarter of 2024 and production in the fourth quarter, implying a slower rollout. Tesla announced in April that it would begin construction in the third quarter and manufacturing in the second quarter.

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The U.S. electric car manufacturer’s Shanghai gigafactory produces 1.1 million vehicles annually. Tesla has not received regulatory authority to boost Shanghai’s EV capacity. In a Sunday tweet, Tesla Inc. announced the establishment of a Shanghai facility that can produce 10,000 Megapack energy products per year to augment its California production.

Chinese state media Xinhua broke the story. Xinhua reported at a Shanghai signing ceremony that Elon Musk’s automobile will start construction in the third quarter and production in the second quarter of 2024. Xinhua reported that the new factory will initially create 10,000 Megapack units a year, equivalent to 40 gigawatt hours of energy storage, to sell globally. It will complement a massive Shanghai electric vehicle manufacturing.

As the globe switches to renewable energy, Tesla will exploit China’s world-leading battery to increase Megapack lithium-ion battery output and cut prices with the new Shanghai factory.

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CATL has also been expanding its energy storage battery supply partnerships with Tesla, which its Chairman Robin Zeng expects to have a larger market than EV batteries. Tesla’s Megafactory in Lathrop, California, produces 10,000 Megapacks annually.

The Shanghai factory began producing Model 3 automobiles in 2019 and can now produce 22,000 per week.

Last May, Reuters claimed that Tesla planned to add 450,000 units at its most prolific automaker, the Gigafactory Shanghai.

However, increased inventories in Shanghai as demand weakened in the third quarter forced the US corporation to slash prices aggressively in its major markets in January.

China, the world’s largest car market, saw EV sales growth decrease to 20.8% in the first two months of 2023 from 150% a year earlier. Tesla will build its Megapack large-scale energy-storage unit in the new site, which will expand its Shanghai electric vehicle plant and investment in China. Construction will begin in the third quarter of this year and the plant will start in the second quarter of 2024.

The Megapack is a gigantic battery that can power 3,600 households for one hour, according to the firm.  Xinhua claimed the new factory will initially create 10,000 Megapacks per year, equivalent to 40 GWh of energy storage, for global sale.