On Tuesday, Tesla formally launched production of its newest Mega factory, in Shanghai-the company's big expansion in energy storage in China. The building is specifically earmarked for large-scale energy storage batteries, in the form of Mega packs, and the first of that kind outside America.
The new factory, with an initial annual capacity of 10,000 units, equivalent to about 40 gigawatt-hours of energy storage, will constitute a piece of Tesla's total global energy strategy. It has estimated a minimum year-over-year increase of 50 percent in energy storage deployments in the year 2025.
Construction works of the Mega factory took only eight months from the actual ground-breaking to initiate mass production. Indeed, this speedy execution is similar to Tesla's China signature, like the Shanghai Gigafactory, built in less than a year and inaugurated in 2019.
"We've witnessed the incredible speed of Shanghai and Tesla once again. I'm excited to have this factory kick off an exciting year for Tesla," said Mike Snyder, Vice President of Tesla, at the launch ceremony on Tuesday, expressing confidence that the new factory will become a cornerstone of Tesla's global production network.
On over 200,000 square meters in the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone, the factory boasts a total investment of about 1.45 billion Yuan or around 202 million U.S. dollars. The facility is Tesla's second major manufacturing site in Shanghai and marks the company's commitment to China with "deeper roots," even amid global trade uncertainties.
"Tesla's decision on the Megafactory shows U.S. companies' confidence in the Chinese market and China's manufacturing capabilities. It reflects a willingness among American firms to engage in deeper cooperation with China," said Wu Qisheng, a researcher at the Shanghai Academy of Social Sciences.
Tesla already has a Megapack factory in California with the same annual capacity of 10,000 units. The new Shanghai facility launch is being considered a milestone as it further solidifies the presence of the U.S. carmaker in one of the world's most important energy and industrial markets.