Tesla launched a new $200m battery factory in Shanghai, expanding its footprint in China even as tensions escalated between Washington and Beijing over trade.
The Megapack facility, located near Tesla's existing carmaking Gigafactory in the Lingang Free Trade Zone, is its first energy storage gigafactory outside the US.
It’s the latest strategic move by the company to strengthen its energy storage business in one of its most critical markets despite geopolitical frictions.
Spanning approximately 200,000sqm, the Shanghai Megapack plant is designed to produce up to 10,000 Megapack units annually, equivalent to about 40GWh of energy storage capacity.
Each Megapack, an advanced lithium-ion battery system, can store over 3,900KWh of electricity, enough to power roughly 3,600 homes for an hour. The plant is expected to ramp up production by mid-2025, with initial units aimed at both domestic and international markets.
Tesla’s CEO, Elon Musk, who is spearheading the changes in government functioning in Washington, did not attend the launch on Tuesday.
This expansion highlights Tesla’s deepening investment in China, the world’s largest energy storage and electric vehicle market, amid the backdrop of a stage trade war.
The move comes shortly after the US imposed new tariffs on Chinese imports, prompting retaliatory measures from Beijing on American goods, including automobiles.
Tesla's presence in China hasn’t been without controversy. The company has faced scrutiny over its handling of consumer complaints, with incidents involving alleged product defects drawing public and governmental attention. Despite these challenges, Tesla remains a dominant player in China’s EV and energy sectors.
The Shanghai Megapack factory is expected to bolster Tesla's position in the global energy storage market, which is projected to grow significantly as countries shift towards renewable energy. The factory’s output will support large-scale energy projects, such as grid stabilisation and renewable energy integration, addressing the increasing demand for reliable, clean energy solutions.
