Megapacks for China
Great news from across the Pacific, as Tesla announces their plans to build a brand new Megapack factory in Shanghai’s Lingang area, close to their extremely successful Gigafactory - and also their battery production partners CATL.
On April 9th, the local Chinese administration signed the deal to allow Tesla to create a large facility to expand their energy storage business into Asia. Construction is due to begin in Q3 of this year, with production likely to start in Q2 of 2024. Tesla has already begun opening job listings for the new site - continuing the company’s tradition of moving at light speed once a project has been announced.
The plan is to ramp up production in Shanghai to hit 10,000 units per year - or 40 gigawatt-hours of storage - as quickly as possible.
This is likely because - in the tweet announcing the deal - CEO Elon Musk said that this new factory would be supplementing the output of Tesla’s current Megapack facility in Lathrop, California - which is also attempting to ramp up production at the moment.
But given that the Shanghai facility is projecting a 10k per year output - and Tesla’s history in the area is one of fast growth - it’s likely going to be doing more than just supplementing Lathrop.
The Chinese government is spending a lot of money on projects meant to shift their massive country’s energy needs away from fossil fuels, and it definitely didn’t escape their notice that countries like Australia, Hungary, Belgium, Brittain, and the US have all been building successful Megapack battery farms to supplement their ageing power grids.
Megapacks are Tesla’s big, commercial energy storage product. They are large cabinets filled with batteries, similar in concept to the company’s Powerwall concept for home backup storage - but on a much bigger scale.
At about 2.6 million USD per unit - with installation support - a Megapack is definitely not something a private owner can usually afford. Private and public entities have been setting up farms of Megapacks to stabilise their energy grids, because just one of them has enough storage to power about 3600 homes for an hour - and their strength is in their modularity. Packs can be added, or taken away - customising the amount of storage available without much of a fuss.
And so, with the success of these large Megapack facilities, Tesla has decided to ramp up production to meet all this new demand - even taking a large chunk of their Investor Day presentation on March 1st to discuss their plans for expansion.
So, even before the California facility gets running fully, it’s likely that the Shanghai Megapack factory will be extremely busy with supplying the Asian market for similar projects to the ones running in other parts of the world. It wouldn’t be surprising to see Shanghai hitting their 10k mark in record time.
That said, the California Megafactory does have a head start, and they’re putting out a good number of Megapacks already. The factory in Lathrop opened up in late October last year, and has been steadily building production up to the goal of 10,000 units per year - just like what Tesla wants with the new Shanghai facility.
Drone flyovers back in February show 86 megapacks in the yard only 10 days after a similar flyover counted 41. So it looks like Lathrop is producing anywhere from roughly 4 units per day, all the way up to 10 in just three months of progress.
The number to hit to make 10k megapacks per year would be about 27 per day, and it’s been a couple months since those flyovers.
Meanwhile new Megapack projects keep being built around the world. The most recent one was shown off by Tesla on April 10th, and shows the Cal Flats project in Monterey County, California.
This site is home to one of the largest solar farms in the state and powers Apple’s California facilities as well as some of the surrounding communities. Combined with the solar farm, this facility can reportedly power up to 100,000 homes annually on pure renewable energy.
Currently, Tesla’s site says the waiting list for Megapack purchases is stretched into 2024 - which makes this new Shanghai facility seem like even more of a good idea. If the Megapack orders were backlogged into 2024 before the Lathrop facility was even fully up and running, imagine how much more work must be on the horizon from the Asian market.