❓WHAT HAPPENED: Tesla has signed a deal to construct its first grid-scale battery power plant in China, resurfacing concerns regarding Tesla CEO Elon Musk’s ties to the Chinese Communist Party (CCP).
👤WHO WAS INVOLVED: Tesla, the Chinese Communist Party (CCP), and China Kangfu International Leasing.
📍WHEN & WHERE: Project announced recently; it will be based in Shanghai, China.
💬KEY QUOTE: “After completion, this project is expected to become the largest grid-side energy storage project in China,” Tesla stated on the Chinese-controlled social media platform Weibo.
🎯IMPACT: The project highlights Tesla’s expansion into China’s energy storage market amid increasing geopolitical tensions between the United States and the CCP.
Elon Musk’s Tesla firm has secured its first deal to construct a grid-scale battery power plant in the People’s Republic of China, which will, upon completion, become the largest of its kind in the country. The company made the announcement on the Chinese Communist Party (CCP)-controlled social media platform Weibo, where Tesla highlighted the project’s potential impact on urban power supply.
The agreement, valued at four billion yuan ($556 million), was signed by Tesla, the local government of Shanghai, and China Kangfu International Leasing, according to Chinese media outlet Yicai. Tesla’s Shanghai factory has already produced over 100 Megapacks in the first quarter of this year, with each Megapack capable of delivering up to one megawatt of power for four hours.
In a statement on Weibo, Tesla described the grid-side energy storage power station as a “smart regulator” for urban electricity, capable of flexibly adjusting grid resources. “After completion, this project is expected to become the largest grid-side energy storage project in China,” Tesla stated, adding that the project would “effectively solve the pressure of urban power supply and ensure the safe, stable, and efficient electricity demand of the city.”
China’s CATL and carmaker BYD, both competitors in the battery market, have made substantial progress in battery development and manufacturing, with CATL holding approximately 40 percent of the global market share. Notably, CATL is also expected to supply battery cells and packs for Tesla’s Megapacks.
The deal comes amid strained trade relations between Beijing and Washington. The agreement also brings additional scrutiny on Elon Musk, who has long been criticized for his business ties to the CCP. Shortly after Musk was tapped as a special government employee to help advise the U.S. Department of Government Efficiency (DOGE), his companies saw a flood of Chinese investors, raising concerns about the possibility of foreign influence over the technology billionaire.
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