On April 8, Elon Musk announced on Twitter that Tesla is preparing to build a new battery factory in Shanghai, China, in his mission to create thousands of new large-scale batteries. Despite the atmosphere surrounding Beijing’s global movements, Musk seems bent to keep his business flowing.
New factory, new batteries
With his new Tesla factory, Musk aims to produce 10,000 of his new giant batteries — dubbed Megapacks — for electric producers and distributors, The New York Times wrote. The building will join another Tesla factory that manufactures its electric vehicles in Shanghai.
The announcement of the Megapacks was made during a signing ceremony for the project in Shanghai, which was attended by Tesla’s senior vice-president of automotive, Tom Zhu, and Shanghai government officials, including vice mayor Wu Qing. Tesla’s Vice-President Tao Lin signed the contract for the factory.
Construction is projected to start in the third quarter of 2023, with manufacturing of the Megapacks expected to begin in the second quarter of 2024, Tesla said in a statement.
Megapacks are said to be able to help stabilize energy grids and stop power outages. These huge batteries are almost the size of an international shipping container, capable of powering up factories or homes during high demand or a blackout. Each battery has the power to energize 3,600 homes in a single hour, according to the Tesla website.
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According to the BBC, China is the largest producer of batteries, allowing Tesla to use them to heighten production and lower costs. Demand for grid-storage batteries has also been growing in China, with solar and wind farms needing to store 10 to 20 percent of the electricity they generate. Beijing has also eased its power markets after blackouts occurred in 2021, after demand overloaded its power suppliers, causing factories to shut down for days.
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Musk said in a tweet that the new factory would “supplement output of Megapack factory in California.” The California factory currently produces 10,000 batteries per year.
Tesla’s first factory in Shanghai — built in 2019 — currently produces 22,000 vehicles a week. However, the company had to cut prices on its Shanghai models after a backlog of unsold vehicles and stiff competition in China hit last month.
Last year, the Biden administration banned technology firms in the U.S. that acquire federal funding from building “advanced technology” facilities in China for 10 years. In August, fearing China’s technological superiority, the President enacted a law that provided $280 billion to “high tech manufacturing and scientific research.”
In the meantime, Republican representative Mike Gallagher and Democrat Raja Krishnamoorthi met with tech executives from Apple, Google and Microsoft to discuss connections with China, as well as censorship of content in the Chinese Market with Disney CEO Bob Iger, Bloomberg reported.
