Tesla agrees to build China’s largest grid-scale battery power plant

Tesla Signed its first agreement to build a battery power plant across the network in China in the midst of a tense commercial relationship between Beijing and Washington.

The American company published on the Chinese social media service Weibo that the project would be the largest of its kind in China once completed.

Battery energy storage systems across public services help electricity networks maintain supply and balance demand. They are increasingly necessary to fill the inadequacy of the supply of demand caused by intermittent energy sources such as solar and wind.

According to Tesla, the local government of Shanghai and the financing company China Kangfu International International International Leasing, the Local Government of Shanghai, the financing company of China Kangfu International Leasing, the local government of Shangfu, companies, indicated that the agreement, worth 4 billion Yuan ($ 556 million), worth 4 billion Yuan (556 million dollars).

Tesla said her battery factory in Shanghai had produced more than 100 megapacks – the battery designed for public services deployment – in the first quarter of this year. A megapack can provide up to 1 megawatt of power for four hours.

“The energy storage power plant on the grid side is an” intelligent regulator “for urban electricity, which can flexibly adjust the grid resources,” Tesla said on Weibo, according to a translation from Google.

This “would effectively solve the pressure of urban food and ensure the demand for safe, stable and efficient electricity of the city,” he added. “After completion, this project should become the largest energy storage project on the network side in China.”

According to the company’s website, each megapack sells just under a million dollars in American pricing for China was not available.

The agreement is important for Tesla, like China Catl and automaker Byd compete with similar products. The two Chinese companies have made significant breakthroughs in the development and manufacture of batteries, the first holding around 40% of the global market share.

CATL also had to provide cells and battery packs used in Tesla megapacks, according to a reuters source of information.

Tesla’s agreement with a Chinese local authority is also significant because it happens after US President Donald Trump stuck the prices on imports from China, supporting the geopolitical relationship between the two largest economies in the world.

Tesla’s general manager Elon Musk was also a close ally of President Trump during the first stages of the trade war, further complicating the commercial outlook for American car manufacturers in China.

However, demand for battery installation on a network scale is important in China. In May of last year, Beijing set a new target to add nearly 5 electrical supply gigawatts powered by battery by the end of 2025, bringing the total capacity to 40 gigawatts.

Tesla has also exported its megapacks to Europe and Asia from its Shanghai factory to meet global demand.

The capacity of global battery energy storage systems increased by 42 gigawatts in 2023, which almost doubles the total increase in the capacity observed the previous year, according to the International Energy Agency.

– CNBC Arjun Kharpal contributed the reports.