Breaking: Tesla Officially Signs A Deal To Build A New 40GWh Megafactory In China

Last week we reported that Tesla China had posted a new job opening for an Engineering Program Manager, Energy Storage. This position is related to Tesla's Megapack, a large-scale battery storage solution that can be used to store electricity to be dispatched later.

Tesla has recently updated its Megapack configurator to list a 3.9 MWh capacity, which is about 50% more energy capacity in a single Megapack than the previous version. The new Megapack XL is 6 feet longer and 60% heavier at 83,996 lbs. The Megapack XL has a 2-hour duration version with power and energy of 1,927 kW / 3,854 kWh per Megapack, and a 4-hour duration version with power and energy of 970 kW / 3,878 kWh per Megapack. The round-trip efficiency of the Megapack XL is 92.0%.

A single Megapack unit is a container-sized 3.9 MWh battery system with integrated modules, inverters, and thermal systems. With the bigger size and integrated power electronics, Tesla claims the Megapack is 60% more energy-dense than its Powerpack. The Megapack XL comes on-site, is ready to install, and can ship in containers.

Earlier this year, Tesla updated Megapack pricing, which changes depending on how many Megapacks you order, but for a single-pack project, Tesla was charging $1,537,910. With the updated bigger Megapack, Tesla has increased the price to $2,414,070 for a project and the EV maker charges a flat 0.5% yearly maintenance fee for Megapack operators.

Although 2.4 million for a single Megapack might seem expensive, the product is nonetheless extremely competitive in price when compared to coal and natural gas powered peaker plants which turn on when the grid is unable to meet high demand.

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Operators who have replaced coal and natural gas peaker plants with Megapacks have reported annual savings of tens of millions of dollars.

The Megapack together with Tesla’s Autobidder software is actually in such high demand, currently, there is more than a two years wait to get the product.

Tesla, to meet the growing demand for the Megapack, last year built a dedicated factory for the product. The Megapack factory in Lathrop, California has an annual capacity of 40GWh or 13,000 Megapacks.

To put this into perspective, Tesla’s Nevada Gigafactory, which it operates with Panasonic and uses to produce all the batteries for the Model 3 and Y built in the US, has a battery cell production capacity of 35GWh.

And in financial terms, 13,000 Megapacks when multiplied by $2.4 million apiece comes out to $30 billion dollars a year. Or in other terms 40% of Tesla’s total revenue in 2022. Currently, the Lathrop facility is in the process of ramping with recent reports suggesting the plant has reached an annual production run rate of 7000 Megapacks.

However, even though the Lathrop California plant has yet to reach its full capacity, Tesla nonetheless seems to be already eager to replicate the plant in other locations and specifically in China.

Although there have been rumors flying around suggesting this claim, the most concrete evidence for a Megapack factory in China came last week as Tesla posted a new job opening on LinkedIn for an Engineering Program Manager, Energy Storage.

In the description for the job, Tesla wrote that it is a full-time job based in Shanghai, China, and that Tesla’s Energy Engineering group is looking for a highly motivated individual to program manage new design engineering projects for the Megapack program.

Continuing Tesla writes…

This is a cross-functional role that requires coordination between many different groups within and outside of Tesla.

You will interface with design engineering, manufacturing engineering, compliance, system testing, reliability, supply chain, and operations to define and drive the development of new product programs while also managing change on existing programs.

You will be immersed in the design engineering process and will shepherd projects from concept through to prototype validation and then production ramp.

You will use your engineering background to understand the product requirements, technical risks, and the validation strategy to accelerate the development process. You will communicate and present project status, highlight schedule risk and develop recovery plans in the event of a project slip.

As an Engineering Program Manager, you would be expected to operate with a high degree of autonomy on your programs while contributing to the development of tools and processes that improve the organization’s productivity.

You will be based out of Shanghai, China with the expectation of some travel to vendors, and other Tesla manufacturing facilities as program needs dictate.

You can read the full breakdown of responsibilities and requirements for the job on LinkedIn however, the main takeaway from the job description was that Tesla is looking to not only sell the Megapack in China but is also looking to produce the product in the country.

And today, Tesla has officially signed a deal to build an energy storage Megafactory with a production capacity of 40 GWh/year. The factory will be located in Shanghai, China, and will be a significant addition to Tesla's energy storage business, which has been booming in recent years.

BREAKING — Megafactory China will have 40 gigawatt-hours per year of production capacity https://t.co/d6KNATD2zn— Whole Mars Catalog (@WholeMarsBlog) April 9, 2023

Although there were reports suggesting Elon Musk will be heading to China this weekend, the Tesla boss was however absent at the signing ceremony for the new factory. In his stead, Tom Zhu, the newly appointed Senior Vice President of Automotive at Tesla, Wang Hao, general manager of Tesla China, and Tao Lin, VP of Tesla, attended the event.

Currently, all available information suggests the plant will be a somewhat replication of Telsa’s Lathrop Megafactory. This is also in line with Tesla’s announcement at the recently held Investor Day that there will be several Lathrop-style Megapack factories coming online in the near future.

We will be sure to keep you posted as Tesla builds out the new factory and grows its energy business. Until then, make sure to visit our site torquenews.com/Tesla regularly for the latest updates.

So what do you think? Are you excited to learn that Tesla has signed a deal to build a new Megapack factory in China? Also, do you think the product will be successful in the country? Let me know your thoughts in the comments below.

Image: Courtesy of Tesla

For more information check out: Tesla Teases 3 New Vehicles, A Bus, Passenger Van, And ‘Semi Light’ In A New White Paper For Master Plan Part 3

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.