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by
Jordy Leo
- December 27, 2023
Tesla [TSLA:US] has acquired a parcel of land in Shanghai for the construction of its Megapack factory, advancing its plan to produce utility-scale energy storage batteries in China, as reported by the South China Morning Post on December 22. Expected to break ground in the first quarter of 2024 and commence production in the fourth quarter, the plant will have the capacity to produce 10,000 battery packs a year. A Megapack can store over 3.9 megawatt-hours (MWh) of energy, equivalent to the power used in one hour by 3,600 households. The project will be Tesla’s first manufacturing facility for energy-storage batteries outside the US and the company’s second plant in Shanghai, where its Gigafactory 3 has delivered more than 2 million electric vehicles (EV).
Tesla intends to take advantage of China’s world-leading battery supply chain to scale up output and lower the costs of its Megapack lithium-ion battery units. These massive batteries are not intended for electric vehicles but for electric utilities, which have a huge demand to store volatile and intermittent renewable energy. Tesla’s investment in energy storage would cement China’s leading position in energy storage and contribute to the country’s green energy future. China already has more than 1,400 gigawatts-hours (GWh) of battery manufacturing capacity with another 6,000 GWh under construction or announced, while the US has the second-biggest pipeline of about 1,000 GWh of capacity. Upon completion, Tesla’s Shanghai Megapack factory will produce batteries with a total energy storage capacity of 40 GWh a year.
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