Tesla is executing on its Master Plan 3 faster than some might expect.
Elon Musk’s electric-vehicle company is planning to build a new “megapack” factory in Shanghai to boost production of its batteries for utility-scale storage applications.
“Our next Megafactory will be in Shanghai—capable of producing 10,000 Megapacks per year,” Tesla (ticker: TSLA) said in a tweet Sunday.
Megapacks are batteries that utilities can use to store some electricity generated by renewable power assets such as wind turbines and solar arrays. Batteries can increase the reliability of renewable power generation assets, reducing the need to have generating capacity from coal and natural gas-based power generation assets that can, essentially, be always on.
Batteries and renewable power generation are a key leg of Tesla’s strategy to wean the world of carbon dioxide-generating fossil fuels. The company laid out its vision for a sustainable energy future in its “Master Plan 3” blog post this past week.
Carbon dioxide is the main gas blamed for global climate change.
Tesla also opened a new Megapack factory in Lathrop, California, in October. The Shanghai plant will add to that battery-storage capacity while also strengthening Tesla’s presence and investment in China, where it already has an EV factory.
The factory could break ground in the third quarter of 2023, with production beginning in the second quarter of 2024, according to reports from Chinese state-run Xinhua News Agency and state television.
Tesla didn’t immediately respond to a request for comment about construction and startup.
Tesla deployed about 6.5 gigawatt hours of battery storage capacity in 2022, up about 64% from 2021. Tesla’s non-automotive sales and gross profit, which includes storage, amounted to about $10 billion and $500 million in 2022, respectively.
Non-automotive sales grew about 52% year over year. Non-automotive gross profit increased from a gross profit loss of $233 million in 2021.
Tesla stock was down 1.1% in premarket trading at $183.
S&P 500
futures rose 0.1%.
Nasdaq Composite
futures fell 0.1%. Coming into Monday trading, Tesla stock has fallen four consecutive days since reporting record quarter deliveries on April 2, that were inline with Wall Street estimates. The decline leaves Tesla shares up about 50% this year.
Write to Callum Keown at callum.keown@dowjones.com, and Al Root at allen.root@dowjones.com.
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