Tesla has reached another impressive milestone with the completion of its Shanghai Megafactory, marking the company’s first energy storage production facility outside the United States.
This new facility, located near Tesla’s existing vehicle Gigafactory in the Lingang area, is dedicated to manufacturing Megapack energy storage batteries and has already started trial production after successfully passing a compleition inspection on December 27, just seven months after construction began in May 2024.
A Record-Setting Construction Timeline
The Shanghai Megafactory exemplifies the company’s renowned “Tesla speed,” completing construction in record time. This rapid development mirrors that of Tesla’s first Shanghai Gigafactory, which was built within a year in 2019. The new facility spans an impressive 2,100,000 square feet and represents a significant investment of approximately 1.45 billion yuan (C$286M/US$202M).
Capacity and Global Impact
The Shanghai Megafactory is designed to produce 10,000 Megapacks annually, equivalent to approximately 40 gigawatt-hours (GWh) of energy storage, matching the output of Tesla’s other Megafactory in Lathrop, Califronia.
Each Megapack can store more than 3 megawatt-hours (MWh) of energy, enough to power around 3,600 homes for an hour. The facility will primarily serve the domestic market but also contribute significantly to Tesla’s global energy storage supply chain.
Energy storage has become a crucial growth driver for Tesla. The company’s energy generation and storage revenue surged by 52% year-over-year in Q3 2024, reaching $2.38 billion with a record gross margin of 30.5%. The Shanghai Megafactory is poised to further bolster these numbers, positioning Tesla as a leader in the commercial energy storage market.
First Customer and Partners
The groundbreaking of the Megafactory included a contract signing with the Shanghai Lingang Economic Development Group, securing the facility’s first orders for Megapacks in China. Furthermore, Tesla has expanded its supply chain partnerships, with CATL and BYD’s FinDreams set to provide lithium iron phosphate (LFP) battery cells for the Megapacks starting in Q1 2025.
As Tesla gears up for mass production in Q1 2025, the Shanghai Megafactory represents a significant step forward in meeting the growing demand for renewable energy solutions worldwide.
