Tesla has received construction approval for yet another massive plant in Shanghai, but this time it won't be making EVs, according to a report by Teslarati.
The new Megafactory will focus on producing the Megapack, a large-scale rechargeable lithium-ion battery specifically designed for use by utilities and other companies looking to bulk up on their clean energy storage infrastructure.
This comes on the tail of Tesla's recent earnings call for the first quarter of 2024, when Elon Musk reported an increase in the sector, outpacing that of EVs so far this year.
"The Megapack, in particular, reached an all-time high in Q1, leading to record profitability for the energy business, and that looks likely to continue to increase in the quarters and years ahead," Musk said. "It will increase — we actually know that it will — significantly faster than the car business, as we expected."
It's actually only the second of its kind, with the first being located in Lathrop, California, which is already supporting a project that can power over 200,000 homes. That Megafactory has been ramping up production to supply a variety of customers across North America and Australia.
Construction on the new China plant should begin this month. Tesla has plans to produce around 10,000 Megapacks per year, with an expected production capacity of 40 gigawatt-hours. It also has an aggressive timeline, with the first Megapacks expected to be delivered in the first quarter of 2025.
It's no surprise that Tesla chose to open this second factory in China. Beyond labor costs, the country has been leading the way in renewable energy adoption. As reported by the Yale School of the Environment, the International Energy Authority noted "the 50 percent increase in global renewable installations in 2023 was largely driven by China."
This new location may help the company save on manufacturing and transportation costs when supplying some of its largest new customers. Neoen, a French company, recently announced plans for a record-breaking storage facility in Western Australia that will rely on Tesla Megapacks.
Building robust energy storage systems like these across the globe is an important step we can take to ensure a more sustainable future.
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