Tesla to Build Energy-Storage Battery Factory in China

In a significant development, American electric automaker Tesla has taken a major step towards producing energy-storage batteries in China. The company recently held a signing ceremony to acquire land for a new factory in Shanghai. According to China’s state media, construction is set to commence early next year, with production expected to begin by the end of the same year, as reported by the official Xinhua News Agency.

While the factory will not manufacture batteries for cars, its primary purpose will be to produce batteries for electric utilities and other companies looking to store power. This move is in response to the increasing importance of storage units due to the rising demand for solar power and wind energy. These renewable sources only generate electricity during favorable weather conditions, necessitating energy storage for later use by residential and commercial users.

Initially, the new factory plans to manufacture 10,000 of Tesla’s Megapack units annually for global distribution. This remarkable announcement comes as a welcome boost for the Chinese economy, which has witnessed a significant decline in foreign investment this year. According to the Commerce Ministry, foreign investment during the first 11 months of this year has dropped by 10% compared to the same period last year.

Foreign Companies Concerned about Chinese Government’s Control

Foreign companies have voiced their concerns regarding the Chinese government’s growing control over business operations on national security and various other grounds. In addition to this, they are also facing increasing restrictions on technology trade with China enforced by the United States.

Tesla’s Experience in China

China serves as a crucial market and manufacturing hub for Tesla. Despite the deteriorating relations between the US and China, Tesla’s CEO, Elon Musk, has managed to foster strong relationships with Chinese officials. In fact, he held meetings with the commerce minister and the former foreign minister in Beijing during May of this year.

Tesla’s Expansion in China

In 2019, Tesla established an electric vehicle manufacturing plant in Shanghai. This facility assembles cars not only for the Chinese market but also for Europe and other overseas markets. As a testament to its success, Tesla currently holds the second position in terms of electric vehicle sales in China, which is experiencing rapid growth.

Rise of BYD in Europe

Chinese auto company BYD has recently made headlines with its plans to construct an electric vehicle factory in Hungary. This venture represents BYD’s first car factory in Europe. While Tesla holds the number two spot in terms of sales, BYD takes the lead as the market leader in China.

Impressive Sales Figures for Tesla

Tesla has witnessed remarkable success, selling a total of 464,654 vehicles in China from January to October this year. This indicates a substantial growth of 37.5% compared to the previous year. Furthermore, these sales account for an impressive 12% of China’s overall electric vehicle sales.

China: A Dominant Force in Renewable Energy

Apart from its influence in the electric vehicle market, China excels in renewable energy as well. The country stands as the global leader in installing wind and solar capacity, thus making it a significant player in the energy storage industry.

These concerns and developments highlight the intricate economic landscape and evolving dynamics between foreign companies, China, and the United States.