Word is out that Giga Shanghai is going to expand in order to produce the compact car, or $25,000 for Tesla. This expansion will also allow for Tesla to produce energy storage products locally.
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Giga Shanghai To Expand, Phase 3, For Compact Car
According to local media sources in China, Tesla is reported to be expanding its Giga Shanghai factory as it expands and prepares to produce the compact car, or $25,000 vehicle, or Model 2 - however you want to call it.
The news from China states:
Exclusive - Tesla plans to restart the Shanghai Phase III factory project, and energy storage products will be supplied domestically
This move by Tesla is very important because Tesla will build this Model 2, and then it will eventually build a sub-compact or Model 1 vehicle.
The article goes on to state this.
Tesla's vehicle and energy storage capacity will both expand, but will demand be sufficient?
The news comes as "Late Auto" has exclusively learned that Tesla is planning on continuing its expansion of its gigafactory in Shanghai.
Tesla already shared earlier this year in April that it will build a new energy storage battery factory in Shanghai with an annual output of 40 GWh. This is equivalent to what the energy storage factory in Lathrop, CA will ultimately build each year. Tesla will then have 2 energy storage factories, but there are many more that will need to be built.
The demand for batteries and energy is going to be virtually limitless, depending on the population of earth and the needs of factories, production, and homes. Tesla expanding its energy in Giga Shanghai is simply one small step to meeting this demand for Tesla.
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When Will Giga Shanghai Have the Compact Car?
Those close to the situation in China have apparently said that Tesla began preparing for the construction of this 3rd phase of development at Giga Shanghai in 2021, but suspended those operations in the middle of 2022.
With the suspension of the expansion, most of those people that were part of it were moved to other areas of Tesla.
"Late Auto" also discovered that the energy storage products built at Giga Shanghai will be sold locally in China. According to the referenced article, Tesla will mainly build the Megapack here. This will be good for China and Tesla. There are some astonishing economics when it comes to the Megapack that will cause Tesla energy to be bigger than the auto business one day.
This is an important expansion for Tesla, but it won't be the last we hear of Tesla building factories for the compact car and the Megapack. The compact car will also be built at Giga Texas and, eventually, Giga Mexico. Giga Mexico is slowly beginning construction, but will take much longer to complete before Giga Texas can ramp the compact car.
Tesla's Giga Shgnahi factory is producing about 1.1 million Model 3 and Model Y vehicles per year.
"Late Auto" seems to think that Tesla will have a demand problem with this car and the Megapack, but I don't think this will happen. Tesla vehicles are highly desired, and utility companies will not only benefit economically from the Megapack, they will also help stabilize China's electricity grid.
There is an electricity shortage coming and China will need the Megapack to be ready for it.
According to "Late Auto", Giga Shanghai is a very efficient factory, producing a car every 37 seconds, while Giga Texas takes 76 seconds.
There is speculation that Tesla will purchase its batteries for the Megapack from CATL in China, and this makes sense. It should use LFP batteries for its energy storage as they cost less, degrade slower, and have less energy density. With stationary battery storage, performance is not needed.
I expect that Giga Shanghai will be producing the compact car in 2025, about the same time as Giga Texas.
I'm sure we'll hear from Elon Musk and others from Tesla more about this expansion at Giga Shanghai, but this is about all I've been able to gather on this - be sure to check back often for more Tesla news.
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Hi! I'm Jeremy Noel Johnson, and I am a Tesla investor and supporter and own a 2022 Model 3 RWD EV and I don't have range anxiety :). I enjoy bringing you breaking Tesla news as well as anything about Tesla or other EV companies I can find, like Aptera. Other interests of mine are AI, Tesla Energy and the Tesla Bot! You can follow me on X.COM or LinkedIn to stay in touch and follow my Tesla and EV news coverage.
Image Credit, New China TV, Screenshot
Article reference: latepost.com
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