Lede

Tesla is building a Megapack battery factory in Shanghai, China, to supplement its California factory, as it looks to increase its investment in China amid growing political tension between Beijing and Washington.

Summary

• Tesla will open a Megapack battery factory in Shanghai to produce 10,000 Megapacks, which are large batteries used to store large amounts of electricity.
• The factory will be able to produce the same amount of energy storage as Tesla’s Megafactory in Lathrop, California.
• Megapacks are designed for utilities and large-scale commercial projects, and can store enough energy to power an average of 3,600 homes for one hour.
• The new factory will be located in Lingang, an enormous free trade zone on the outskirts of Shanghai, where Tesla’s electric-vehicle Gigafactory broke ground in 2019.
• The Shanghai facility is Tesla’s main export hub, supplying vehicles to most markets outside of North America.
• Chinese state media outlet Xinhua reported that Tesla will break ground on the Megapack factory in the third quarter of 2023, and production is set to begin in the second quarter of 2024.
• Last month, Tesla sold 88,869 Shanghai-made EVs in China, a 35% increase from the previous year.
• Daniel Ives, an analyst at Wedbush Securities, said that the announcement is a "potential game changer for Tesla on the battery front," and that the new factory is another "flex the muscle moment for Musk."
• Tesla is the second largest EV maker in China behind BYD, which sold 206,089 units last month.
• The China Passenger Car Association estimates that sales of new energy cars, mostly EVs, will account for 36% of total car sales in 2023.