BEIJING: Elon Musk’s electric vehicle maker Tesla said it is expanding in China as it builds the latest factory to make its large-scale batteries.
The plant in Shanghai would be capable enough to produce 10,000 of its “Megapack” energy storage units a year, according to the firm.
A Megapack is a huge battery that is used to help stabilise energy grids and prevent power outages. Tesla company is already running a Megapack plant in California, which produces 10,000 units per annum. Elon Musk said on Twitter the latest Chinese plant would be in addition to Tesla’s United States factory.
Tesla opening Megapack factory in Shanghai to supplement output of Megapack factory in California https://t.co/hDpqoyNeOx
— Elon Musk (@elonmusk) April 9, 2023
According to Chinese state media outlet Xinhua, building work on the fresh Megapack plant in China is expected to start later this year with battery production due to get underway by summer 2024. Tesla didn’t respond to a BBC request for comment.
China is a massive producer of batteries, which Tesla company will be able to tap into to raise production and lower costs.
The announcement came as the United States government has been pressing local companies to become less reliant on China amid a rising tussle between Washington and Beijing. Last year, United States technology firms received federal funding restrictions by the Biden administration from building “advanced technology” facilities in China for ten years.
The guidelines were part of a $50bn plan aimed at building up the United States semiconductor industry. In August, Biden signed a law committing 280bn dollars to high-tech manufacturing and scientific research, amid fears that the United States is losing its technological edge to China.
Tesla’s first factory outside US
In 2019, Tesla company opened its first factory outside the United States in Shanghai. The Tesla plant currently produces 22,000 cars a week. Tesla makes vehicles in Germany and announced plans for another overseas plant in Monterrey, Mexico.
China, which is the globe’s largest vehicle market, has seen a sharp drop in car sales this year as the economy slows.
Previous month, Tesla company cut the prices on models made at its Shanghai Tesla plant as it faced a backlog of unsold cars and tough competition in the country.
