Image: Official WeChat account of Shanghai Lingang
By ESS news
Electric vehicle and energy storage maker Tesla started its mega-factory in Shanghai in December 2023 and completed the signing ceremony for the land purchase. Once completed, the new factory will cover an area of 200,000 square meters and have a price tag of RMB 1.45 billion. This project, which marks its entry into the Chinese market, is an important milestone for the company’s strategy for the global energy storage market.
As demand for energy storage continues to grow, the China-based factory is expected to fill Tesla’s capacity gap and become a key supply region for Tesla’s global orders. Furthermore, as China has been the largest country with newly installed electrochemical energy storage capacity in recent years, Tesla is likely to enter the country’s storage market with its Shanghai-made Megapack energy storage systems.
Tesla has been scaling up its energy storage activities in China since the beginning of this year. The company announced earlier in May the construction of a factory in Shanghai’s Lingang Pilot Free Trade Zone and signed a supply agreement for eight Megapacks with the Shanghai Lingang Data Center, securing the first batch of orders for its Megapacks in China.
Currently, China’s public auction for large-scale projects has experienced intense price competition. The quote for a two-hour utility-scale energy storage system is RMB 0.6-0.7/Wh ($0.08-0.09/Wh) as of June 2024. Tesla’s product prices are not competitive with the Chinese manufacturers, but it company has rich experiences in global projects and strong brand impact.
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