On May 23rd, Tesla's Shanghai Energy Storage Super Factory held its groundbreaking ceremony in Lingang, Shanghai. Following the ceremony, Lingang Group also signed a contract with Tesla for the first batch of large-scale electrochemical commercial energy storage systems, Megapack, in China. This marks the beginning of a new journey for Tesla's business in China.
At the groundbreaking ceremony, Tesla's Senior Vice President, Zhu Xiaotong, stated, "Tesla is committed to using disruptive technology to address fundamental issues in the transportation and energy sectors, forming an innovative technological complex integrating the entire industry chain in electric vehicles, energy storage products, artificial intelligence, and robotics. Tesla's energy storage business, as an important part of its diversified strategy, is leading the global energy storage market development with its advanced technology and innovative products. The groundbreaking of the Shanghai Gigafactory for energy storage will undoubtedly further solidify Tesla's leading position in the energy storage field and drive progress and development in the global green energy industry."
Mike Snyder, Senior Director of Energy and Charging Business at Tesla, expressed his gratitude through a pre-recorded video, saying, "We are very grateful for the continuous strong support from the Shanghai and Lingang governments, which has enabled the Tesla Gigafactory for energy storage to officially start construction in such a short time."
Tesla's Shanghai Gigafactory is Tesla's first energy storage super factory outside the United States. The initial batch of orders for its main product, the Megapack, a super large-scale electrochemical commercial energy storage system, was signed between Lingang Group and Tesla on the same day. This signifies Tesla's initiation of a new chapter in its business in China, supporting Lingang's new area in building a low-carbon city strategy and achieving its "dual carbon" goals.
The Shanghai Energy Storage Super Factory will produce Tesla's large-scale electrochemical commercial energy storage system Megapack. The factory is expected to start production in the first quarter of 2025, with an estimated annual capacity of 10,000 units and a storage capacity of nearly 40 gigawatt-hours (1 gigawatt-hour = 1000 megawatt-hours).
Each Megapack energy storage system can store over 3.9 megawatt-hours of energy, enough to meet the one-hour electricity demand of 3600 households or power 65 rear-wheel-drive versions of the Model 3 when fully charged.
This marks another major investment project in China for Tesla, following the Shanghai Gigafactory over the past decade. The factory not only represents another significant move in Tesla's global energy storage layout but also serves as a strong testament to its crucial role in the global energy transition wave.
Currently, Tesla's Shanghai Gigafactory has an annual production capacity of over 950,000 vehicles, with Tesla having more than 1.7 million car owners in China.
Continuous updates on "Tesla Speed," Megapack energy storage system is about to start production in Shanghai.
As a significant energy project in Shanghai, the construction of the Shanghai Energy Storage Super Factory will help Shanghai establish a green energy system and drive the city towards a more environmentally friendly and sustainable direction.
In Lingang, this thriving area, in 2019, Tesla's Shanghai Super Factory set the pace with the "Shanghai Speed" and "Tesla Speed" of starting construction, production, and delivery all in the same year. Now, Tesla's Shanghai Energy Storage Super Factory once again exemplifies the "Tesla Speed."
The "speed" factor is also evident in Tesla's layout and development in the energy storage field.
Since 2015, Tesla has introduced the Powerwall for residential energy storage and the Megapack for large-scale commercial energy storage in the United States, targeting the residential energy storage market, as well as the commercial and industrial energy storage markets. Tesla's energy storage products are currently available in over 65 countries and regions worldwide, with an installed capacity of 14.7 gigawatt-hours in 2023. The first quarter of 2024 saw a record-breaking installation of 4.1 gigawatt-hours, marking one of Tesla's fastest-growing businesses. In the first quarter of 2024, the gross profit of the energy storage business increased by 140% year-on-year.
Currently, Tesla's Megapack energy storage system is continuously supporting the development of new energy in multiple countries globally, including the United States, the United Kingdom, and Australia, and is gradually becoming a popular energy storage product worldwide, helping many countries address the issue of traditional fossil fuel shortages.
For example, in the state of Victoria, Australia, the Victoria Big Battery is one of the world's largest renewable energy storage projects. With the completion of renewable energy generation facilities and 212 Megapack units, it provides ample backup power protection for the region.
Elon Musk has stated that the future of renewable energy depends on large-scale energy storage. The Tesla Megapack energy storage system can support low-cost, high-density utility and commercial projects on a scale of up to gigawatt-hours. Flexibility is also a key feature of the Megapack energy storage system, as it can be integrated and installed with battery modules, inverters, and temperature systems at any time, helping the grid operate more stably and sustainably.
In terms of design, Tesla has matched each battery module with a dedicated inverter, with each unit undergoing extensive testing and containing integrated safety systems, professional monitoring software, etc., significantly improving energy efficiency and safety. Additionally, Megapack batteries can be continuously optimized through over-the-air updates for real-time enhancements.
As Tesla's flagship product, the Megapack's outstanding performance and flexible scalability will meet the diverse energy needs of global customers, further enhancing Tesla's competitiveness in the energy storage market.
Image Source: WeChat Official Account "Shanghai Lingang"
Tesla's energy storage business growth will continue to increase significantly
During the fourth quarter earnings call in 2023, Musk stated, "For years, I have been predicting that the growth rate of the energy storage business will far outpace that of the electric vehicle business. It is happening."
According to Bloomberg's forecast, by 2030, the global market demand for energy storage batteries will reach 1,000 gigawatt-hours, with a market size of $1.2 trillion. With the commencement of the Shanghai energy storage super factory, it signals that Tesla's layout and integrated innovation in the fields of electric vehicles, energy storage, and artificial intelligence will enter the next stage, demonstrating the disruptive growth potential and transformative imagination that could change human lifestyles.
For this innovative tech giant, electric vehicles serve as the foundational carrier for applications, aiming to integrate electric vehicles, energy storage products, key technologies in artificial intelligence, and robotics to form a software-hardware integrated closed loop. The core competitiveness in the future lies in disruptive innovation, industry transformation, and imagination brought about by such groundbreaking technologies.
Previously, Tesla announced a comprehensive increase in investment in artificial intelligence and Robotaxi, entering the All-in era of autonomous driving. Musk revealed on social media that the cumulative investment in the field of autonomous driving in 2024 will exceed $10 billion. Tesla has already rolled out FSD full self-driving capability (supervised version) to North American owners, introducing "end-to-end neural network" technology, a transformation hailed as a "game-changing technology."
Today, Tesla has become one of the few leaders in AI that has amassed massive training data, large-scale computing power, fully autonomous driving software and hardware, advanced manufacturing, and sustainable energy supply.
Tesla's energy storage business, as a significant part of its diversification strategy, may also lead the global energy storage market development with its technology and innovative products.
