U.S. carmaker Tesla Inc. announced Sunday that it will build a new mega factory in Shanghai, which will be dedicated to manufacturing the company's energy-storage product Megapack.
The new plant is scheduled to break ground in the third quarter of the year and start production in the second quarter of 2024, Tesla said at a signing ceremony of the project in Shanghai.
The new factory will initially produce 10,000 Megapack units every year, equal to around 40 GWh of energy storage. The products will be sold worldwide.
It will be located in the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone.
The landing of the factory is expected to create another industrial cluster worth over 100 billion yuan (14.6 billion U.S. dollars), said Lu Yu, an official with the Lin-gang Special Area Administration.
Zhuang Mudi, deputy secretary-general of the Shanghai municipal government, said the project would help drive the development of the new energy-storage industry and the green and low-carbon transformation of Shanghai.
In January 2019, Tesla broke ground on its Shanghai Gigafactory, becoming the first to benefit from a new policy allowing foreign carmakers to set up wholly-owned subsidiaries in China.
As Tesla's first Gigafactory outside the United States, the plant delivered 710,000 vehicles in 2022, an increase of 48 percent from 2021. It has become Tesla's primary vehicle export hub, with electric cars selling well in Asia-Pacific, Europe and other regions.
Since 2019, Tesla has been ramping up investment in Lingang, expanding the production capacity of the Shanghai factory and building more facilities including a supercharger manufacturing factory.
Thanks to the excellent business environment in Shanghai and the Lingang Special Area, the Tesla Shanghai Gigafactory has an industrial chain localization rate of more than 95 percent, said Tao Lin, vice president of Tesla.