Tesla, Elon Musk’s electric car startup, says it is expanding in China by building a new factory to produce large-scale batteries.
Tesla Megapack Factory to be Built in Shanghai
According to the company, the Shanghai plant will be able to create 10,000 of its “Megapack” energy storage units per year.
A Megapack is a massive battery that can help stabilize energy grids and prevent power outages.
Tesla already has a Megapack facility in California that manufactures 10,000 units each year.
Elon Musk stated on Twitter that the new Chinese plant will be in addition to Tesla’s existing US facility.
Tesla opening Megapack factory in Shanghai to supplement output of Megapack factory in California https://t.co/hDpqoyNeOx
— Elon Musk (@elonmusk) April 9, 2023
Elon Musk did not immediately react to a request for comment from an international news broadcaster.
China is the world’s largest producer of batteries, which Tesla will be able to use to boost output and reduce costs.
The statement comes as the US government is pressuring American companies to become less reliant on China as tensions between Beijing and Washington rise.
The Biden administration restricted US technology firms that receive federal money from developing “advanced technology” facilities in China for ten years last year.
The rules were part of a $50 billion (£40 billion) initiative to expand the US semiconductor industry.
In August, President Joe Biden signed legislation dedicating $280 billion to high-tech manufacturing and scientific research, amid concerns that the United States is losing its technical advantage to China.
The EV company launched its first manufacturing outside the United States in Shanghai in 2019. Currently, the facility produces 22,000 automobiles every week.
It also manufactures vehicles near Berlin, Germany, and has announced plans for a new overseas plant in Monterrey, Mexico.
This year has seen a dramatic reduction in vehicle sales in China, the world’s largest car market, as the economy slows.
Tesla reduced the prices of models manufactured at its Shanghai plant last month in response to a backlog of unsold vehicles and stiff competition in the country.
To read our blog on “Tesla reports record-breaking deliveries but poor overall sales,” click here.
