Last month Tesla watchers were blindsided after a photo emerged of 10 guys brandishing shovels supposedly breaking ground on a brand new manufacturing plant in northern California.
So what's actually going on?
Is Elon Musk moving Tesla production back to the golden state? and if so why ?
Join us today as we find out what is Tesla's new mega factory. For reasons best known to himself Elon Musk decided it wasn't worth announcing his newest venture in a typically splashy fashion so it was left to the Mayor of Lathrop one Sunny Daliwal to tell the world about Megafactory via a mildly cringy photo on a Facebook post. “we are proud to be the home of the mega factory “ Tesla's most recent expansion gushed Danny Wells post “the future of green energy will be produced right here in our community it went on this development means more prosperity for our city, more employment opportunities for our residents and a brighter future for our planet.”
Tesla is actually an old friend of the small northern California city population about 23000. According to a recent sec filing Elon Musk's company already owns a 500000 square foot building in Lathrop about an hour east of Tesla's more famous Fremont factory. In addition, Tesla holds long-term leases on at least three more buildings in town covering in total more than a million square feet this includes an existing 870000 square foot Tesla distribution centre.
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But wait Tesla's in the business of Gigafactories right? Vast monuments to the unbeatable might of sheer industrial scale why would Musk suddenly be interested in the presumably smaller mega factory? because this isn't a car factory it's just for making batteries.
Although widely perceived in the public imagination as an automaker, Tesla's mission statement is more broadly to accelerate the world's transition to sustainable energy.
You'll probably already know about Tesla's power wall and power pack battery solutions designed to store energy for later use in domestic or small business applications.
This new mega factory will instead produce mega packs. A mega pack since you ask is a container size 3 megawatt hour battery system with integrated modules, inverters and thermal systems. Launched two years ago, mega pack scale substantially greater than that of powerwall or power pack is intended to serve the utilities industry so if you're running a solar or wind farm, a mega pack or more likely a small network of mega packs will help you store energy during low demand periods to be released onto the grid at the time of most need this is called renewable smoothing and is widely seen as an essential remedy for the inherently intermittent nature of most renewable energy sources.
Mega packs are already being installed in the field last month. The Arizona electric utilities salt river project bought online a 100 megawatt-hour Mega pack project utility firm pacific gas and electric company has constructed a 182 megawatt system with the help of Tesla at an electric substation in moss landing near Monterey that should be operational before the end of this year.
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To date mega packs have been manufactured on a comparatively modest scale as something of a sideline at Tesla's Gigafactory in Sparx Nevada. This new Lathrop facility will be the first factory dedicated entirely to mega pack production and possibly other battery models suggesting confidence that this part of the Tesla Empire looks a viable prospect going forward.
Certainly mega packs look attractive to the burgeoning renewable sector they require 40% less space and 10 times fewer parts than existing storage systems. They're 60% more energy dense pound for pound than a power pack and they can be installed according to Tesla anyway 10 times faster.
The whole thing can be handily shipped anywhere like a regular shipping container mega pack already has supplemental kits such as battery modules, Bi-directional inverters, Thermal management systems and complex controls as standard so how much demand does Tesla anticipate there might be for this awesome but comparatively niche product. Well clearly enough that it's worth building a new factory.
Back in June on a quarterly earnings call, Elon Musk told investors in his view there were significant unmet demand for utility scale storage products like Mega pack alone.
Musk set is already basically sold out through next year and he estimated demand for his domestic power wall could soon top one million units per year, in fact Musk indicated he'd be shipping a whole lot more of these outsized batteries where it not for the ongoing global semiconductor shortage we use a lot of the same chips in the power wall as you do in a car so it's like which one do we want to make.
He apparently said on the call cars or power walls we need to make cars so powerwall production has been reduced if you're a utility company looking to invest in a mega pack they can be pre ordered on Tesla's website right now for around a cool million bucks each
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And in case you're thinking that photo of 10 men holding spades looks a little less than legit Tesla's website is also advertising dozens of serious jobs for the forthcoming laptop facility so Tesla's forthcoming mega factory will be in the business of producing mega pack batteries in order to smooth mankind's transition to renewable energy sources fingers crossed there's enough superconductors to go around by then.
What do you think will Elon's mega factory be a decisive game changer in the wholesale switch to renewable? Let us know in the comments and don't forget to share with your techie friends and do checkout more of our high energy tech content.
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