Elon Musk’s electric car company Tesla says it will be expanding in China by building a new factory there to make its large-scale batteries.
The plant in Shanghai will be able to produce 10,000 of its “Megapack” energy storage units a year, the firm says. A Megapack is a very large battery that can be used to help stabilize energy grids and prevent power outages.
Tesla already has a Megapack plant in California, which also produces 10,000 units each year.
Musk said on Twitter that the new Chinese plant will be in addition to Tesla’s US factory.
Tesla opening Megapack factory in Shanghai to supplement output of Megapack factory in California https://t.co/hDpqoyNeOx
— Elon Musk (@elonmusk) April 9, 2023
Work on Tesla’s Megapack plant in China to start this year
Building work on the new Megapack plant in China is expected to begin later this year, with battery production due to get underway by the summer of 2024, according to Chinese state media outlet Xinhua.
China is the biggest producer of batteries, which Tesla will be able tap into to increase production and lower costs.
The announcement came as the US government has been pressing American companies to become less reliant on China amid rising tensions between Beijing and Washington.
Last year, US technology firms that receive federal funding were banned by the Biden administration from building “advanced technology” facilities in China for 10 years. The guidelines were part of a $50bn (£40bn) plan aimed at building up the US semiconductor industry.
In August, Biden signed a law committing $280bn to high-tech manufacturing and scientific research, amid fears that the US is losing its technological edge to China.
In 2019, Tesla opened its first factory outside the US in Shanghai. The plant currently produces 22,000 vehicles a week.
Tesla also makes cars near Berlin in Germany and announced plans for another overseas plant in Monterrey, Mexico.
Tesla has become the most valuable car brand
Tesla has become the most valuable car brand in the world, according to the latest survey from Brand Finance.
The electric-car pioneer, led by Elon Musk, saw its brand value skyrocket by 44% to $66.2bn, making it the first car brand to take pole position from traditional combustion engines. This is the first time that Tesla has grabbed the top spot, surpassing last year’s leader, Mercedes-Benz, whose brand value fell by 3% to $58.8bn.
Before the pandemic, Tesla was worth only a fifth of its current value.
According to Alex Haigh, Brand Finance’s valuation director, this growth in brand value for Tesla is a positive sign, indicating that consumers are recognizing and valuing the brand more, which could lead to increased sales and revenue.