Tesla has officially landed a deal to build what it says will be the largest grid-scale battery power plant in China when completed, marking a significant milestone in its global energy ambitions (via CNBC).
Announced via Tesla’s official Weibo account, the project will be powered by the company’s utility-grade Megapack battery systems. These massive batteries can deliver up to 1 megawatt of power for four hours and are designed to stabilize electricity grids by addressing the intermittent nature of renewable energy sources like solar and wind.
According to a report from Chinese media outlet Yicai, the deal — worth 4 billion yuan (approximately $556 million) — was signed between Tesla, the Shanghai municipal government, and financing firm China Kangfu International Leasing. The new facility will be located in Shanghai, where Tesla’s existing battery factory has already produced over 100 Megapack units in Q1 of this year.
Tesla described the upcoming facility as a “smart regulator” for urban electricity, per a Google translation of the company’s Weibo post. The company added that the power plant will “effectively solve the pressure of urban power supply and ensure the safe, stable and efficient electricity demand of the city.”
This project will support Beijing’s national goal of adding 5 gigawatts of battery-powered storage by the end of 2025, boosting China’s total capacity to 40 GW.
In addition, the move is strategically significant for Tesla. The company will be going up against local battery giants CATL and BYD, which together dominate the global battery storage market. According to Reuters, CATL is also expected to supply battery cells for the Tesla Megapacks that will be deployed for this project, signaling a collaborative yet competitive energy ecosystem.
Tesla manufactures the bulk of its utility-grade batteries at its Megafactory in Lathrop, California, which churned out its 10,000th Megapack last year. The company also unveiled plans for a new Megapack manufacturing facility in Brookshire, Texas, in March.
