Investing.com — Tesla’s (NASDAQ:) energy storage gigafactory in Shanghai has entered trial production, just seven months after construction began, with full-scale production expected to commence early next year, state news agency Xinhua reports, citing information from Tesla China.

The Shanghai plant is dedicated to producing Tesla’s Megapack energy storage batteries, with mass production anticipated to fully ramp up in the first quarter of 2025, the company told Xinhua.

This marks Tesla’s second factory in Shanghai, reinforcing the company’s ongoing investment in China despite increasing political discourse in the U.S. around “decoupling” and “de-risking” from the Chinese market.

The plant’s construction highlights what Tesla calls “Tesla speed” in China, following the rapid development of its first gigafactory in Shanghai, which was completed and operational within a year in 2019.

The new facility is designed to produce 10,000 units annually, equivalent to around 40 GWh of energy storage. Spanning approximately 200,000 square meters, the factory represents an investment of about 1.45 billion yuan ($201.7 million), according to the Lin-gang Special Area administration of the China (Shanghai) Pilot Free Trade Zone.

This megafactory is Tesla’s first energy storage plant outside the United States and follows the launch of the original gigafactory in 2019, which saw an initial investment exceeding 50 billion yuan.

At the plant’s launch event in May, Tesla secured the first set of Megapack orders in China by signing an agreement with Shanghai Lingang Economic Development (Group) Co., Ltd.

Tesla CEO Elon Musk ruled out the possibility of establishing a factory in the UK, citing a lack of investor confidence under the current Labour-led government.

Musk’s comments came in response to reports that Ash Regan, a Member of the Scottish Parliament, had invited him to consider building a new gigafactory in Scotland.

Tesla currently operates just one gigafactory in Europe, located near Berlin. Opened in 2022, the facility manufactures the Model Y and produces battery cells.


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