Tesla, led by Elon Musk, is set to build the largest battery energy storage facility in China, with a significant investment of $556 million (approximately 4 billion yuan). This project marks Tesla’s first grid-scale energy storage plant in China and comes amid ongoing trade tensions between the United States and China.
Tesla signed the agreement with the Shanghai local government and the financing firm China Kangfu. Once completed, the plant is expected to be the largest grid-side energy storage project in the country. It will rely on Tesla’s "Megapacks," which are large-scale battery units capable of delivering up to 1 megawatt of power for four hours.
In a post on the Chinese social media platform Weibo, Tesla described the project as a "smart regulator" for urban electricity grids, helping to flexibly distribute energy resources. The company noted that this initiative would alleviate pressure on urban power supply systems and ensure stable, safe, and efficient energy delivery.
The factory producing these massive battery packs is located in Shanghai, and it manufactured over 100 Megapacks in the first quarter of this year. Interestingly, Tesla has already begun exporting these batteries to Europe and Asia, highlighting the growing global demand for renewable energy storage solutions.
This project arrives at a time when Tesla is facing strong competition from Chinese battery giants like CATL and BYD. CATL, which holds around 40% of the global market, is also expected to supply components for Tesla’s Megapacks.
According to a Reuters report, China aims to add around 5 gigawatts of battery storage capacity by 2025, reflecting a significant push to support renewable energy sources such as solar and wind, which can be intermittent in supply.
Thus, this project is not only a strategic leap for Tesla in China but also a major development in the global energy storage sector, which is experiencing unprecedented growth.
