Tesla will soon construct a Shanghai plant manufacturing the Megapack energy storage product, says a report by Xinhua.
Tesla will begin constructing their plant in Q3 and commence production in Q2 of 2024, according to Xinhua's report on a signing ceremony in Shanghai.
The upcoming factory in Shanghai will supplement the existing electric vehicle plant and manufacture 10,000 Megapack units annually, equivalent to roughly 40 gigawatt hours of energy storage, for worldwide distribution.
Tesla's new plant in Shanghai will utilize China's prominent battery supply chain to increase production and decrease costs of their Megapack lithium-ion battery units. This move will address the growing demand for energy storage worldwide as renewable energy usage increases.
Tesla's revenue primarily comes from electric cars; however, Elon Musk aims to expand the solar energy and battery division to match the same revenue.
CATL, a Chinese battery giant, is strengthening partnerships with clients like Tesla in energy storage battery supplies, which Chairman Robin Zeng believes, will have a greater market impact than EV batteries.
Tesla's factory in Lathrop, CA can produce 10,000 Megapacks annually.
Shanghai's Model 3 production began in 2019, enabling the company to manufacture 22,000 vehicles each week.
Tesla aimed to increase the output of Gigafactory Shanghai, its most productive car plant, with a expansion plan for 450,000 units annually, stated Reuters in May.
The American company faced inventory issues in Shanghai due to reduced demand in Q3, resulting in significant price reductions worldwide in January.
China's electric vehicle market growth rate has decreased from 150 per cent to 20.8 per cent in the first two months of 2023, signaling a slowdown.
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