- Electric vehicle maker Tesla (TSLA) is expanding in China as it builds a new factory to make its large-scale batteries
- The plant in Shanghai will be able to produce 10,000 of its “Megapack” energy storage units per year
- Construction on the new Chinese factory is expected to begin by Q3 2023, with production set to start in the second half of 2024
- Tesla Inc. (TSLA) stock opened trading at US$178.57 per share
Electric vehicle maker Tesla (TSLA) is expanding in China as it builds a new factory to make its large-scale batteries.
The plant in Shanghai will be able to produce 10,000 of its “Megapack” energy storage units per year. A Megapack is a very large battery that can be used to help stabilise energy grids and prevent power outages.
The batteries can allow grid operators to move excess energy capacity between regions, such as counties or states, and ensure that power from intermittent sources can be stored and used when demand is particularly high.
The batteries will also help to prevent power outages in China, which has been an ongoing problem, which has left millions of homes and businesses hit by power cuts.
Construction on the new Chinese factory is expected to begin by Q3 2023, with production set to start in the second half of 2024, according to Chinese state media.
The firm already has a Megapack plant, which opened in April 2022 in Northern California, and it also produces 10,000 units each year.
Musk tweeted that the new Chinese plant will be in addition to Tesla’s U.S. factory.
In March 2019, Tesla broke ground on a new factory in Shanghai, China, which produces 22,000 vehicles a week. Tesla also has an auto plant in Germany and earlier this year announced plans for another plant in just south of the Texas border in the Mexican state of Nuevo León.
Vehicle sales have dropped in China in recent years as the economy slows. The China Association of Automobile Manufacturers had trimmed its forecast for new auto sales in the world’s biggest vehicle market.
As it faces a backlog of unsold vehicles and tough competition in the country, Tesla cut the prices on models made at its Shanghai plant. This reverses a trend of increases across the industry, which some analysts have interpreted as signs of softening demand.
In an effort to be more competitive in China, Tesla has been cutting prices while it raises prices in the U.S. as the cost of raw materials climbs.
There may be a few more details shared by the company once it posts its financial results for Q1 2023 after market close on Wednesday, April 19. In its update on the webcast, the company said more than 440,000 vehicles were produced in Q1 and over 422,000 vehicles were delivered. The company stated it is continuing its transition towards a more even regional mix of vehicle builds, including Model S/X vehicles in transit to Europe, the Middle East, Africa, and the Asia-Pacific markets.
While Tesla Inc. (TSLA) stock is down 47.5 per cent since this time, last year, it has risen 45.6 per cent since the year began and opened trading at US$178.57 per share.