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CATL Starts Building Its Second Battery Plant Next to Tesla Giga Shanghai

Chinese media offered in January the first clues about CATL’s plans to build a second battery factory next to Tesla Giga Shanghai. Now we learned the construction has officially started, with the new battery plant expected to start production in about one year.
A rendering of the future CATL plant in Lingang 9 photos
Chinese Tesla Model 3 LFP departing ShanghaiCATL LFP CellsCATLCATL LFP CellsCATL LFP CellsCATLCATL LFP CellsCATL Factory
Tesla started using the LFP cells in the base version made-in-China Model 3 RWD in October 2020. One year later, the new chemistry began its international journey and we now know even the American-made Model 3 features the new cells for the base version of the car. Nevertheless, Tesla Giga Shanghai is the place that manufactures the most cars with LFP batteries and Chinese supplier CATL has a hard time keeping up with Tesla’s demand.

Last month Chinese media started talking about CATL’s plans to build a second plant to supply Tesla with LFP batteries. According to CNEVPost, CATL has officially started building the new plant in Shanghai's Lingang New Area, where Giga Shanghai is located. The new facility will have a total floor area of about 350,000 square meters and will cost 2.8 billion yuan ($440 million) to complete.

Unlike the existing CATL plant near Tesla Giga Shanghai, which only makes the modules but does not actually manufacture the Li-Ion cells, the new facility will build everything under one roof. The new project mentions building a “green and efficient smart factory” to develop advanced materials, system structures, extreme manufacturing, and business model innovation, according to a press release by the Lingang New Area management committee.

The first CATL battery plant next to Giga Shanghai was converted from an existing facility, saving the Chinese company seven to eight months of construction time. But this came with constraints and we know the facility is only able to assemble battery modules, but cannot produce Li-Ion cells. The new battery factory that CATL started building, on the other hand, will be able to manufacture everything, from the cells to the complete batteries.

Tesla Giga Shanghai delivery volume last year was close to 500,000 vehicles, which poses serious logistic problems for Tesla suppliers like CATL. Without the second battery factory on-site, the costs of supplying the battery modules to Tesla would be very high, considering the long battery logistic chain.


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