Tesla to build new EV battery factory in Shanghai

Tesla Inc is building a new battery factory in Shanghai, boosting investment in China amid rising tensions between Beijing and Washington.

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Updated on:
April 9, 2023 at 17:05 pm

File photo for representational purposes.

Tesla will produce its Megapack large energy storage units at the new factory, which will add to its electric vehicle factory in Shanghai. The announcement was made at a project signing ceremony in Shanghai by the Elon Musk-led company, which is said to be visiting China this weekend, according to the official Xinhua news agency.

Construction is scheduled to start in the third quarter of this year, and the plant will begin production in the second quarter of 2024. Austin, Texas-based Tesla did not immediately respond to a request for comment outside normal business hours.

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Tesla’s deepening of its China investment comes shortly after France’s Airbus announced plans to double production capacity in China for one of its best-selling jets. The European planemaker will add a second final assembly line for the A320 narrow-body jet at its existing factory in Tianjin, according to an agreement signed by Chief Executive Guillaume Fury in Beijing on Thursday.

The new manufacturing project boosts Chinese industry as Apple and others rethink production in the country amid heightened tensions with the United States, from the alleged Chinese spy balloon being shot down over the United States to Beijing’s dispute with Russian President Vladimir Putin. Radimir Putin Partnership.

File photo for representational purposes.

File photo for representational purposes.

The Megapack is designed to act as a giant battery to help stabilize the grid, and the company says each unit can store enough energy to power an average of 3,600 homes for an hour. The new factory will initially produce 10,000 Megapacks a year, equivalent to about 40 GWh of energy storage, Xinhua said, adding that the products would be sold globally. China, home to BYD, a rising global electric car star, is an extremely important market for Tesla.

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Its existing car plant, which it wholly owns on the outskirts of Shanghai, produced nearly 711,000 vehicles last year, accounting for 52% of the U.S. electric carmaker’s global output — even as production was disrupted by China’s now-abandoned Covid-Zero policy — and Musk has long benefited from his close relationship with Beijing.

Authorities rolled out the red carpet to help Tesla build its first factory outside the U.S. in early 2019, with Shanghai government officials helping the company resume production in a timely manner following pandemic-related disruptions. However, Musk’s time in China has not been all smooth sailing.

The expansion of the Shanghai electric car factory was delayed due to data concerns over Tesla’s connection to Starlink, Musk’s space-internet plan, people familiar with the matter said earlier this year, days after angry Tesla owners flooded Chinese showrooms to complain Missed out on another round of price cuts.

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In early 2021, Tesla vehicles were also banned from entering Chinese military installations and residential areas due to concerns that the vehicles’ built-in cameras could collect sensitive data.

China is the most competitive market for cars, Musk said on an earnings call in January. He has made similar comments before, including in an online forum in September 2021, when he said he had “a lot of respect for many Chinese automakers.”

First published date: April 9, 2023 at 17:05 PM UST


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