Tesla To Build New Battery Factory In Shanghai After Musk Visit
Elon Musk
Justin Sullivan via Getty Images

Tesla said it will build an additional plant in Shanghai, China, to meet worldwide demand for large batteries even after the communist nation’s manufacturing sector took several blows as a result of aggressive government lockdowns.

The electric automaker revealed on Sunday that the new Megafactory in Shanghai will be capable of annually producing 10,000 powerful utility-scale energy storage batteries, which the firm calls Megapacks. Each unit can store three megawatt-hours of energy capable of powering 3,600 homes for one hour in the event of an outage.

Tesla CEO Elon Musk announced on social media that the Megafactory will “supplement output” from a similar facility in Lathrop, California, which can likewise produce 10,000 units per year, equal to 40 gigawatt-hours of energy storage capacity. Musk visited Shanghai over the weekend, meeting with local officials and possibly visiting the company’s existing vehicle assembly plant in the city, according to a report from Bloomberg.

The expansion into China occurs after the nation’s manufacturing sector experienced severe disruption amid harsh government lockdowns and public health measures, the impacts of which were felt across the globe through supply chain disruptions and worsened inflation. American manufacturing orders from China had plummeted as much as 40% at the end of last year, according to data from the CNBC Supply Chain Heat Map.

Prominent American companies moved their operations to rising manufacturing economies in response to the lockdowns, which shuttered Shanghai and other prominent cities for months with little warning. Apple moved some iPad production out of Shanghai last summer, while anti-lockdown protests at the world’s largest iPhone manufacturing facility in Zhengzhou prompted the company to accelerate production shifts to nations such as India and Vietnam.

Musk emerged as a leading critic of lockdown orders despite his willingness to expand operations in China. The world’s richest man grew increasingly frustrated as lockdowns in California prevented the reopening of Tesla facilities during the spring of 2020, calling the phenomenon “the final straw” and moving the automaker’s corporate headquarters to Texas.

The gross domestic product of China has increased at an average 9% annual rate since the country opened and reformed its economy more than four decades ago, according to data from the World Bank, enabling more than 800 million residents to escape poverty. Higher levels of prosperity and an increasingly sophisticated economy, on the other hand, has caused a rapid surge in Chinese wages such that American firms are increasingly likely to keep their operations in the United States, Canada, or Mexico, according to data from consulting firm INS Global.

Geopolitical tensions surrounding the possible Chinese invasion of Taiwan and suspected espionage from Chinese technology firms have also contributed to worsened trade relations with the United States. Senior officials in the Biden administration are moving to prohibit American companies from investing in Chinese firms involved with developing sensitive technologies such as advanced semiconductors, quantum computing, and artificial intelligence.


Tesla, which reported the highest quarterly revenues seen in company history last year despite controversy over Musk’s recent acquisition of social media platform Twitter, has also continued to expand operations throughout the United States. The firm unveiled intentions to construct two new factories in Nevada that will increase manufacturing capacity for battery cells and opened a new hub for technology employees in California.

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The Daily Wire   >  Read   >  Tesla To Build New Battery Factory In Shanghai After Musk Visit