Elon Musk says Tesla will construct a “new battery factory” in Shanghai

Elon Musk’s electric vehicle manufacturer, Tesla, claims to be growing in China as it constructs a new factory to produce its large-scale batteries.

The company claims that the Shanghai plant will be able to generate 10,000 of its “Megapack” energy storage units annually.

Megapacks, a massive battery that can be used to stabilise electricity grids and avert blackouts, are available. 10,000 of the units are produced annually at Tesla’s existing Megapack facility in California. The new Chinese plant will complement Tesla’s US manufacturing, according to Mr. Musk’s tweet.

According to Xinhua, a Chinese state-run media site, construction on the new Megapack plant in China is anticipated to start later this year, with battery production beginning by the summer of 2024.

Tesla will be able to increase output and reduce prices by utilising China, which is the world’s largest producer of batteries. The statement came at a time when the US government has been pressuring American businesses to depend less on China due to escalating hostilities between Beijing and Washington.

The Biden administration barred US technology companies last year from constructing “advanced technology” facilities in China for a period of ten years. These companies get federal assistance.

A $50 billion (£40 billion) strategy to expand the US semiconductor industry included the criteria. A statute dedicating $280 billion to high-tech manufacturing and scientific research was signed by Mr. Biden in August, amid worries that China was gaining ground on the US in terms of technology.

2019 saw the opening of Tesla’s first manufacturing facility outside the US, in Shanghai. Currently, 22,000 automobiles per week are produced at the facility.

Tesla has also made announcements about plans for a new overseas plant in Monterrey, Mexico, which is close to Berlin, Germany.

The world’s largest auto market, China, has experienced a dramatic decline in vehicle sales this year as the country’s economy weakens.

Due to a backlog of unsold cars and fierce competition in the market, Tesla this month lowered the cost of models produced at its Shanghai site.