Tesla has opened its “Megafactory”, a new production facility in California, so called because it will produce the company’s large-scale Megapack battery system.
News of the previously unannounced plant was confirmed by Lathrop Mayor Sonny Dhaliwal in a Facebook post which has been deleted and reposted. “We are proud to house the Megafactory, Tesla’s newest expansion here,” he said. “The future of green energy will be produced right here in our community. “
The plant, in the small town of Lathrop, in Northern California, is near Tesla’s auto plant in Fremont. Lathrop is also home to Tesla’s 870,000 square foot distribution center.
Megapacks, along with Tesla’s other energy storage products, were made in the automaker’s so-called “Gigafactory” in Sparks, Nevada. This is the first dedicated Megapack facility, although it is not clear whether production of Tesla’s other storage products – which include Powerwall and Powerpacks – will shift to the new factory.
The new plant is a positive signal for the growing energy division of the automaker. Unlike the Powerwall, which is a consumer battery product, the Megapack is for large-scale energy storage. Utilities that build solar and wind farms are increasingly pairing them with large batteries to store excess energy to later be discharged onto the grid. Arizona’s Salt River Project utility company last week put a 100 megawatt hour Megapack project online.
During a second quarter earnings call in June, CEO Elon Musk confirmed that there was “significant unmet demand” for these storage products, adding that the Megapack was “essentially sold out until the next year”. He also estimated Powerwall’s demand at over one million units per year.
Much of the bottleneck isn’t just due to production capacity – Musk also told investors that cell supply and the global semiconductor shortage are creating production caps.
“We use a lot of the same chips in the powerwall as we do in a car, so it’s like, which one do you want to do? ” he said. “Cars or Powerwalls? So we have to make cars, so it will be – Powerwall production has been reduced. “
The chip shortage, however, does not seem to show any sign of abating; in fact, the White House will host its second summit on Thursday with semiconductor manufacturers and buyers to discuss current effects on the tech and auto industries.