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Tesla breaks ground on 'Megapack' battery factory in Shanghai

Tesla on Thursday broke ground on its second factory in Shanghai, preparing to launch construction on a plant that will manufacture energy-storage batteries. File Photo by John Angelillo/UPI
Tesla on Thursday broke ground on its second factory in Shanghai, preparing to launch construction on a plant that will manufacture energy-storage batteries. File Photo by John Angelillo/UPI | License Photo

May 23 (UPI) -- Tesla broke ground on a factory in Shanghai on Thursday, the company's first so-called "mega-factory" outside of the United States.

The $203.94 million plant will begin producing Megapack batteries with an initial capacity of 10,000 units per year beginning in 2025.

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"With Tesla's benchmark project, we anticipate that within the next three to five years, an industrial cluster centered around energy storage will rapidly emerge," Lin-gang Special Area Administration official Lu Yu said, according to Xinhua News.

Tao Lin, vice president of Tesla China, hailed the groundbreaking as a "milestone for both Shanghai and Tesla."

"In a more open environment, we can create a new Tesla speed at the Megapack factory, and supply the global market with large-scale energy-storage batteries manufactured in China," she said.

The factory is the second Tesla plant in Shanghai, joining the Gigafactory, which became its first plant outside of the United States in 2019.

"Breaking ground on our new mega factory in Shanghai. Together with Giga Shanghai, it will help accelerate the world's transition to sustainable energy," Tesla Asia said on X.

The Gigafactory opened with plans to produce Tesla Model 3 vehicles for the Chinese market with plans for producing 500,000 electric vehicles per year at peak capacity.

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The construction of the battery plant comes as Tesla faces steeper competition in the EV market in China, that led the automaker to cut is prices by up to 6% earlier this year.

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