Benzinga - by Anan Ashraf, Benzinga Editor.
EV giant Tesla Inc (NASDAQ:TSLA) has reportedly received approval from the Office of the Management Committee of Lingang New Area, China (Shanghai) Pilot Free Trade Zone, for its new megafactory project.
What Happened: The project is located in Nanhui New Town, Pudong New Area, and will cover over 204,000 square meters, local media platform Pandaily reported on Thursday. Tesla currently has only one megafactory, located in Lathrop, California.
A Megapack is a powerful stationary battery that stabilizes the grid. Each unit can store over 3.9 MWh of energy or enough to power an average of 3600 homes for one hour, according to Tesla.
Deliveries from the new factory will reportedly start by the first quarter of 2025. Tesla first announced plans to manufacture 10,000 Megapacks in a year in China, equalling about 40 gigawatts of energy storage, in April 2023.
Why It Matters: Last month, Tesla CEO Elon Musk said that the demand for its stationary energy storage products is “super high” and hinted that the company might make more batteries for energy storage than cars in the long term.
In the first quarter of 2024, Tesla deployed 4,053 MWh of energy storage products, representing its highest quarterly deployment to date and a year-on-year increase of 4.2%.
In January, the company expressed expectations for the growth rate of deployment and revenue in the energy storage business in 2024 to surpass that of the automotive sector.
Tesla acknowledged that deployments may be subject to volatility and impacted by logistics and global product distribution. Nevertheless, it remains optimistic about continued growth on a 12-month basis.
The EV giant already operates a 4.5-million-square-foot facility in China, Giga Shanghai, which produces the popular Model 3 and Model Y SUVs and rolled out its 2-millionth vehicle in September last year.
The move also comes amid Tesla’s largest layoffs, which has also significantly affected its Chinese workforce.
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Read More: Tesla CEO Elon Musk Draws Parallel Between Netflix’s Decision To Focus On Streaming Over Renting DVDs To EV Maker Doubling Down On Vehicle Autonomy
Photo courtesy: Tesla
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