The US electric vehicle giant Tesla has commenced trial production of energy storage technology at its new Tesla Shanghai Megafactory. This marks another step in the cooperation between China and the United States.
The Tesla Shanghai Megafactory, focused on producing Tesla’s Megapack energy storage batteries, is set to ramp up to full mass production by the first quarter of 2025. With an initial capacity to produce 10,000 units per year, equivalent to 40 gigawatt-hours of energy storage, this factory represents a major investment in sustainable technology.
This is Tesla’s second manufacturing site in Shanghai, following the success of the Shanghai Gigafactory, which was built in record time in 2019. The new Tesla Shanghai Megafactory is, which covers 200,000 square meters, was built with an investment of approximately 1.45 billion yuan ($201.7 million), highlighting Tesla’s confidence in China’s manufacturing prowess and the economic synergy between the two nations in the new energy sector.
Trial production launched just seven months after construction began. At the launch ceremony in May, Tesla signed an agreement with Shanghai Lingang Economic Development Group to secure initial orders for Megapacks within China.
Tesla Vice President Tao Lin praised China’s efforts in developing the new energy industry, citing the country’s comprehensive industrial chain, substantial market potential, and supportive business environment as key factors for enterprise growth.
China, already a global leader in renewable energy, saw its installed renewable capacity surpass thermal power for the first time in 2023, significantly contributing to global green energy capacity.
Tesla Shanghai Megafactory proves that the trade relationship between China and the US is fundamentally beneficial
Liu Qing, Vice President at the China Institute of International Studies, noted that Tesla’s energy storage technology has found commercial success in the US, and there is considerable potential for further market-driven collaboration between China and the US, especially in energy storage and conservation.
According to Wu Xinbo from Fudan University, the rapid construction of this facility was also attributed to China’s advanced infrastructure and the robust business environment in Shanghai.
Tesla has not been alone in deepening ties with the Chinese market this year. Foreign investment in China has seen a notable uptick, with 52,379 new foreign-invested companies established in the first 11 months, an 8.9% increase yearly.
BRNN:
”German auto expert Kupferschmidt noted that China has achieved mastery over much of the value chain, spanning from raw materials to battery technology.”
China’s commitment to further opening up its market was demonstrated through various measures in 2024, including eliminating all market access restrictions for foreign investors in manufacturing with the new national negative list effective November 1, 2024.
The Tesla Shanghai Megafactory has also been a success story. The 3-millionth vehicle rolled off the line in October 2024, with one-third of these vehicles destined for international markets. In the first three quarters of the year, the factory delivered 675,000 vehicles, accounting for over half of Tesla’s global deliveries.
Wu Xinbo highlighted that the economic and trade relationship between China and the US is fundamentally beneficial, arguing that decoupling would be detrimental to US industries, given that half of Tesla’s global vehicle production capacity is now in Shanghai.
This collaboration between Tesla and China underscores the significant mutual benefits of continued cooperation in the new energy sector.
Sources and related
- Shanghai.gov.cn: Tesla’s Shanghai energy storage megafactory begins trial production
- China Daily: Tesla’s Shanghai megafactory kicks off trial production
- NewsVoice: NewsVoice Visits Chinese Leading Think Tank: The Shanghai Institutes for International Studies
- Belt and Road Portal: Tesla’s Shanghai megafactory kicks off trial production
- BRNN: Electric Vehicle: An Irreversible Trend