Tesla Inc. has announced that its newly built megafactory in Shanghai has started production, with the first Megapack rolling off the production line. This significant milestone marks a major boost to the company’s fast-growing energy storage segment.
What Happened
The first Megapack produced at the Shanghai megafactory will be shipped to Australia. This powerful battery is designed for large-scale energy storage, with each unit capable of storing over 3.9 Megawatt-hours of energy - enough to power approximately 3,600 homes for an hour.
The Shanghai Megafactory
The Shanghai megafactory is Tesla’s first factory dedicated to the production of energy storage products outside the United States. Currently, the company has only one other factory dedicated to manufacturing Megapacks, located in Lathrop, California, which has the capacity to produce 40 GWh of energy storage products annually. Notably, Tesla began constructing the Shanghai megafactory in May and has achieved production in under a year, a remarkable feat.
Why It Matters
Tesla’s energy generation and storage segment has been experiencing significant growth, with revenue of over $3 billion in the fourth quarter, more than double the $1.44 billion reported in the corresponding quarter of 2023. The company deployed a record 11.0 GWh of energy storage products during this period. The energy segment accounted for approximately 12% of Tesla’s total revenue in the quarter, while the automotive segment accounted for 77%. Despite missing street consensus estimates, Tesla remains hopeful for its energy segment, expecting energy storage deployment to grow at least 50% year-over-year in 2025.
Future Prospects
Both the Powerwall and Megapack continue to be in high demand, with supply constraints as the company expands into new markets. With the Shanghai megafactory now online, Tesla is well-positioned to meet the growing demand for its energy storage products and further accelerate its growth in the energy segment.
Key Takeaways
- Tesla’s Shanghai megafactory has started production, marking a significant milestone for the company’s energy storage segment.
- The first Megapack produced will be shipped to Australia, showcasing the company’s capabilities in large-scale energy storage.
- The Shanghai megafactory is expected to play a crucial role in meeting the growing demand for Tesla’s energy storage products, with the company anticipating at least 50% year-over-year growth in energy storage deployment in 2025.