Big battery boost as Tesla plans second Megapack factory in Shanghai

Tesla has announced that it will be expanding its energy storage business by building it’s next energy storage Megafactory in Shanghai.

The facility will be used to manufacture Tesla’s Megapack energy storage products with an expected output of 40 GWh of battery energy storage packs.

Tesla confirmed that in a Twitter post over the weekend which showcased the agreement signing ceremony between Tesla and the Lingang special area administration.

The Lingang area is where Tesla has a long-term lease on the land where the current Tesla GiagShanghai factory is located.

The same factory in Shanghai is the global export hub for Tesla and has delivered every customer’s Tesla to Australia over the last two years.

A fresh supply of potentially 10,000 Megapacks a year coming from the same place can only be a good thing for the Australian big battery market, which is racing to install storage capacity fast enough to support renewables and usher out coal.

Construction of the Megapack factory is expected to begin in Q3 of this year with production to start in the first half of next year.

Once production commences in Q2 2024, this will be Tesla’s second Megapack factory. The first factory is located in Lathrop, California.

Elon Musk also posted on Twitter the significance of this project.

Tesla describes the megapack as “Massive Energy Storage” and Australia has seen several projects using the Tesla Megapacks already.

It can be used to supplement the grid to prevent blackouts. According to Tesla, it’s there to promote a cleaner grid:

“The future of renewable energy relies on large-scale energy storage. Megapack is a powerful battery that provides energy storage and support, helping to stabilize the grid and prevent outages. By strengthening our sustainable energy infrastructure, we can create a cleaner grid that protects our communities and the environment.”

The demand for the Megapacks is so high that there’s nearly a two-year wait time on these with an estimated starting price of $US2,669,050 if one pack is ordered including installation.

This is much bigger news for not only the energy storage business but also for the vehicle business too as Tesla further expands its battery manufacturing operations outside of the US.

The world’s transition to sustainable energy production and storage is still in its infancy and with Tesla growing its footprint with this Megapack plant, it’s a clear indication that the energy storage markets are about to be supercharged.