Tesla (NASDAQ:TSLA) has begun construction on a massive battery factory in Shanghai, Chinese state media reported on Thursday, marking the US electric car giant's second plant in the financial hub.
The project, announced last April, came after CEO Elon Musk outlined an ambitious plan to boost growth. Despite this, Tesla reported a 55% drop in quarterly earnings last month, reflecting a decrease in EV sales amid fierce market competition.
According to state news agency Xinhua, the new Shanghai factory will produce 10,000 Megapack batteries annually. These Megapacks are designed to store energy and stabilize power grids, with each unit capable of storing over three megawatt-hours of power.
The factory is expected to begin mass production in 2025, state media reported earlier this month.
"I believe the new plant is a milestone for both Shanghai and Tesla," the company's vice president Tao Lin told Xinhua.
"In a more open environment, we can... supply the global market with large-scale energy-storage batteries manufactured in China."
Tesla’s new battery plant will be the EV giant’s second facility in Shanghai, following the construction of its large Shanghai Gigafactory in 2019.