The [factory](https://inleo.io/@leoglossary/leoglossary-factory) in Shanghai is completed.


We have to give it to the Chinese, they really know how to build things.  This factory went from nothing to completion in 7 [months](https://inleo.io/@leoglossary/leoglossary-month).  This was a clean design and [construction](https://inleo.io/@leoglossary/leoglossary-construction-industry) from scratch.


With the factory complete, it is time to being the testing of the lines, entering the pre-production phase.


This is a crucial milestone for the [company](https://inleo.io/@leoglossary/leoglossary-company-business).  We are looking at a potential output double the Lathrop plant.


 <center> https://img.inleo.io/DQmNXRvvYvPKsBQiatx5nnjHwRV6WZ584yVcVSwvAwuHQ2C/image.png 
Image generated by Grok </center>



# Tesla Megapack Factory In Shanghai


Tesla Energy is quickly becoming a major contributor to the company. 


Last quarter, the [profit](https://inleo.io/@leoglossary/leoglossary-profit) margin on the [energy](https://inleo.io/@leoglossary/leoglossary-energy) division was 30%.  This is more than the automotive, which dropped to under 20% the last few [years](https://inleo.io/@leoglossary/leoglossary-year).  The automotive industry tends to have single digit margins.


While Tesla does better than the rest of the industry, the energy division is significantly larger.  We have to keep in mind this is from a factory in the United States.  It is likely the [China](https://inleo.io/@leoglossary/leoglossary-china) factory will operate at a lower [cost](https://inleo.io/@leoglossary/leoglossary-cost).


The expected output is forecast to eventually reach twice the output of Lathrop.  Here we are looking at roughly 20K Megapacks annually.


At a present [price](https://inleo.io/@leoglossary/leoglossary-price) of $1 million per Megapack, this adds up to some significant [revenue](https://inleo.io/@leoglossary/leoglossary-revenue).  More importantly, the profits are likely to skyrocket.


## The Growth Of Stationary Storage


This is a [market](https://inleo.io/@leoglossary/leoglossary-market) with an enormous total addressible market (TAM).  Utilities around the [world](https://inleo.io/@leoglossary/leoglossary-world) are looking for ways to improve their electrical grids.


Stationary storage is a path to leverage the existing system at a time when the demand is outpacing supply.  With an estimated 3% annual growth of output, this trails the 7% forecast increase in demand.


companies that get into this market are basically printing [money](https://inleo.io/@leoglossary/leoglossary-money).  Over the next decade, the amount of batteries place is incalculable.  Tesla is one of the companies positioning itself to ride this wave.


Virual Power Plants (VPP) is a new energy structure.  We will see thousands of them erected around the world.  Ultimately, there will be millions of [homes](https://inleo.io/@leoglossary/leoglossary-home) under this format, many generating energy.  The ability to arbitrage power generation from the utilities, something they are doing themselves, only enhances the [opportunity](https://inleo.io/@leoglossary/leoglossary-opportunity).


We are moving towards a future of distribution.  [electricity](https://inleo.io/@leoglossary/leoglossary-electricity) is vital to things going forward.  [AI](https://inleo.io/@leoglossary/leoglossary-artificial-intelligence) is the main force driving this, atlhough there will likely be other contributors.


As for Tesla, the next step is to see how quickly this new factory can ramp.  Once again, the Chinese seem to excel in this arena.




____


<center> [What Is Hive](https://inleo.io/@leoglossary/leoglossary-what-is-hive) </center>




Posted Using [InLeo Alpha](https://inleo.io/@taskmaster4450le/tesla-megapack-factory-done-dht)