Tesla Will Build A Chinese Factory For Its Megapacks

Tesla will open a second factory in China but this new facility won’t be building any of the carmaker’s EVs. Instead, it will be responsible for making the brand’s Megapack battery storage offering.

Current plans call for work on the factory to commence in the third quarter with an aim of commencing production in the second quarter of 2024. Elon Musk believes the company will benefit from China’s strong battery supply chain to boost production and reduce costs.

Local Chinese publication Xinhua reports that the factory in Shanghai will initially produce 10,000 Megapack units each year, equating to around 40 gigawatt hours of energy storage. These packs will be sold around the world.

Our next Megafactory will be in Shanghai 🇨🇳—capable of producing 10k Megapacks per year pic.twitter.com/KlVGq5gYOg

— Tesla (@Tesla) April 9, 2023

Tesla already operates a Megapack factory in Lathrop, California that’s also capable of producing 10,000 units annually.

Electrek understands that Tesla currently has a two-year backlog of orders for the Megapack.

Read: BYD Is Seeking To Overthrow Tesla In The EV Race This Year

This year could prove to be a pivotal one for Tesla in China. While it has been leading the world’s race to electric vehicles in recent years, Chinese automaker BYD aims to overtake Tesla as the world’s leading EV manufacturer in terms of sales volume this year. Indeed, BYD wants to double its sales of new energy vehicles this year, consisting of EVs and hybrids, and believes it can rival Tesla’s plan of selling 1.8 million EVs in 2023.

Achieving this target won’t be easy for the brand. It sold just 260,000 electric vehicles in the first quarter but plans to dramatically expand output throughout the rest of the year.

Rendering of Tesla’s Megapack factory in the U.S.