Tesla Commences Construction of Shanghai Megafactory, Its First Dedicated Energy Storage Facility Outside the U.S.

Tesla has officially begun construction of its highly anticipated Shanghai Megafactory on May 23, 2024. This facility marks the electric vehicle maker’s first dedicated energy storage site outside the United States.

The Shanghai Megafactory, which will produce Megapack batteries, will complement Giga Shanghai as Tesla China’s main production facilities. According to a CNEV Post report, the new Megapack factory is located in the Lingang area, close to Gigafactory Shanghai, and spans approximately 200,000 square meters (49.4 acres).

Tesla senior vice president Tom Zhu highlighted the significance of the new facility in the company’s global battery storage strategy. “The Shanghai Megafactory will play a critical role in our efforts to support the world’s transition to sustainable energy,” Zhu said. He noted that the Megapack, designed for grid use, positions the facility to make a notable impact.

The Shanghai Megafactory represents Tesla’s most significant investment in China since entering the market a decade ago. The facility is projected to have an annual capacity of 10,000 Megapack batteries, translating to around 40 GWh of energy storage. “This number of Megapack batteries could power 50,000 Shanghai homes for a year,” Zhu remarked. The executive also confirmed that production is expected to commence in the first quarter of 2025.

Tesla’s Megapack is the company’s flagship battery storage product, designed for grid use with each unit capable of storing 3.9 MWh of energy—sufficient to power 3,600 homes for an hour. The Megapack is also fully scalable, making it an attractive alternative to traditional peaker plants.

Construction of the Shanghai Megafactory faced some delays. Initial plans indicated that construction would start in Q3 2023 with production beginning in Q2 2024. However, by April 2024, local media reported that Tesla China had revised the timeline, scheduling construction to start in May 2024 and mass production in Q1 2025. On May 16, Shanghai authorities granted the project a construction permit, enabling the commencement of the facility’s buildout.