Tesla will start producing Megapacks, its utility-scale energy storage product, from a new plant in Shanghai from Q2 2024.
The company announced the deal with the Lin-gang Special Area Administration, which administers the Pilot Free Trade Zone where the plant will be located, on 9 April. The facility will be Tesla’s second factory dedicated to producing Megapacks after its first in Lathrop, California, opened in 2021.
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The Shanghai factory is targeting an initial output of 10,000 Megapacks a year or around 40GWh of energy storage capacity, the same as its California site. It is schedule to break ground in the third quarter of this year, and adds to an existing EV plant in the city.
“Five years ago, the Tesla Gigafactory helped Shanghai become a hub for the new energy vehicle industry. Today, we witness the signing of Tesla’s energy storage Megafactory, which will definitely become an important driving force in promoting the development of energy storage in Shanghai and its low carbon transition,” said Zhuang Mudi, deputy secretary-general of the Shanghai government.
The products from the new Shanghai Megapack facility will be sold worldwide, the company said. However, the location will likely be particularly useful for gaining market share in the Asia-Pacific region, where competitors Fluence, Wartsila and Powin have gained a strong foothold.
The announcement is also noteworthy as other battery energy storage system (BESS) integrators are by and large increasing or moving more production capacity to the US itself, Powin and Fluence being recent examples.
CEO Elon Musk alluded to an upcoming announcement about a second Megapack site in a recent investor call, as reported by Energy-Storage.news. Tesla deployed 6.5GWh of energy storage across its utility-scale, commercial and industrial (Powerpack) and residential (Powerwall) segments in 2022.
Energy-Storage.news’ publisher Solar Media will host the 1st Energy Storage Summit Asia, 11-12 July 2023 in Singapore. The event will help give clarity on this nascent, yet quickly growing market, bringing together a community of credible independent generators, policymakers, banks, funds, off-takers and technology providers. For more information, go to the website.