April 14, 2023: At a plant in Shanghai, a Tesla sign might soon be seen. Read ahead to know more.
As a complement to the production of the Megapack plant in California, Tesla Inc (TSLA.O) is constructing a facility in Shanghai that can produce 10,000 Megapack energy products annually, the firm announced in a tweet on Sunday.
What are Tesla Megapacks?
Tesla Megapacks are large-scale energy storage systems developed by Tesla.
Imagine a really big battery that can store a lot of electricity, much like the battery in your toy car but much, much bigger! It's called a Tesla Megapack. It's so big that it can store enough electricity to power thousands of homes or even charge many electric cars all at once. It's like having a giant energy storage system that can save electricity for when it's needed the most, like during a storm or when lots of people want to charge their electric cars. It helps make sure we have enough electricity when we need it and can even help the environment by using clean energy from the sun or the wind to charge it. It's like having a super-sized battery that helps us use electricity in a smarter and more sustainable way!
Picture source: TESLA
Megapacks use lithium-ion battery technology, similar to those used in electric vehicles.
Tesla Megapacks are typically used in commercial, industrial, and utility-scale settings where a significant amount of energy storage is needed. They can be integrated with renewable energy sources like solar or wind power to store excess energy for later use.
A state-run news agency in China, named Xinhua broke the story first. Xinhua reported at a signing event in Shanghai that Elon Musk's company will break ground on the factory in the third quarter and begin manufacturing during the second quarter of 2024.
The new factory, which will initially create 10,000 Megapack units annually, roughly 40-gigawatt hours of energy retention, to be marketed internationally, would supplement a sizable existing electric car manufacturing facility in Shanghai, according to Xinhua.
The Chinese battery giant CATL (300750.SZ) has been advancing its partnerships with customers like Tesla in the area of energy storage battery supply since its Chairman Robin Zeng anticipated that this market will be greater than that of batteries for electric cars (EV).
Currently, Tesla can produce 10,000 Megapacks annually at its Megafactory in Lathrop, California. The business started making Model 3 vehicles in Shanghai in 2019 and can now produce 22,000 vehicles per week.
Reuters reported in May 2022, that Tesla intended to increase the yearly capacity of the Gigafactory Shanghai, its most prolific vehicle manufacturing facility, by 450,000 units.
However, when demand began to wane in the third quarter, the American corporation struggled with mounting inventories in Shanghai, which prompted drastic price cuts in its key international markets in January.
The world's largest car market, China, saw EV sales growth decrease to 20.8% in January and February 2023 from 150% in the same time in 2018.