The US electric vehicle maker will build a super battery manufacturing plant in Shanghai.
Tensions between the United States and China have never been higher.
The world’s two major economic powers are currently locked in a latent technological war.
Other lines of tension relate to the Chinese spy balloon that flew over the US to collect intelligence on various sensitive US military sites and the Russian war in Ukraine. Beijing has backed Vladimir Putin’s Russia, while Washington and its NATO allies back Ukraine.
It is in this tense context that Tesla (TSLA) – Get a free reportthe world leader in electric vehicles, has just doubled its investments in China.
Second Factory in China
The Austin, Texas-based automaker will build a factory in Shanghai for the production of its Megapack energy storage system, the group and its chief executive Elon Musk said on April 9.
“Our next mega factory will be in Shanghai 🇨🇳, capable of producing 10,000 mega packs a year,” the company announced on Twitter, holding a signing ceremony in Shanghai.
“Tesla opens the Megapack factory in Shanghai to complement the production of the Megapack factory in California,” Musk confirmed.
The company did not disclose the amount of the new investments.
The American automaker will begin construction of this new plant in the third quarter with the ambition to start production in the second quarter of 2024.
The facility will initially produce 10,000 Megapack batteries per year, or about 40 gigawatt hours of storage, which will be sold worldwide. A Megapack unit can store enough energy to power an average of 3,600 homes for an hour, Tesla said. The company claims that its Megapacks, intended to store energy and stabilize the supply of electrical networks, can store more than 3 megawatt hours each.
Tesla gets most of its revenue from its electric car business, but Musk has vowed to expand his solar and battery business.
This will be Tesla’s second in Shanghai, after opening a large site in 2019. The Shanghai plant, which produces the company’s two most popular models, the Model 3 and Model Y, serves the Asian and Chinese markets. European. Giga Shanghai has a production capacity of more than 750,000 vehicles a year, according to the company.
musk in china
The announcement comes amid tensions between the United States and China, which have escalated into a kind of technological warfare. Beijing is also trying to attract foreign investors and companies as the Chinese economy tries to revive, after years of covid-19, marred by the lockdown that saw the country cut off from the world.
In recent days, Apple (AAPL) – Get a free reportCEO Tim Cook has been visiting China, where he was received by Premier Li Qiang, who became prime minister last month. Li is leading the country’s efforts to convince international companies to continue investing in China.
China is an important market for Tesla. It is its second largest market in terms of sales. Musk is reportedly in China this Easter weekend with Tom Zhu, the former head of China operations, who was promoted to head of production operations at Tesla last year. Zhu is now the company’s manufacturing leader. This promotion makes him one of Musk’s potential successors as CEO.
Tesla’s relationship with China has drawn attention in Washington, with President Joe Biden saying in November that the group’s leadership ties to foreign countries were “worthy” of scrutiny.
The Megapack plant announcement comes on the heels of Musk’s presentation to investors of an ambitious but vague growth plan last month. He had confirmed in early March the construction in Mexico of another vehicle production plant, near Monterrey, in the north of the country.
