Groundbreaking for Tesla’s Megapack energy storage plant in Shanghai

Groundbreaking for Tesla’s Megapack energy storage plant in Shanghai
Groundbreaking for Tesla’s Megapack energy storage plant in Shanghai

American electric car producer Tesla broke ground on Thursday on a mega-factory in Shanghai, which will be the company’s first energy storage system factory outside the United States to manufacture its energy storage batteries. energy known as Megapacks.

Observers said the factory was a striking new example of how industrial and technological cooperation between China and the United States could lead to a win-win outcome. “It highlights the fact that, despite the escalation of trade tensions and discord in bilateral relations caused by Washington, American companies are taking a pragmatic approach in making commercial decisions and attaching great importance to the competitiveness of the Chinese new energy industry. It is also a vigorous refutation of the discourse on “overcapacity” conveyed by certain Western politicians and media,” Chinese experts argued.

This project is another major investment for Tesla in China, following the inauguration of its Shanghai Gigafactory in 2019, which Tesla called “the opening of a new chapter” in China. The announcement comes after Tesla CEO Elon Musk’s April 29 visit to China, during which he met with Chinese Premier Li Qiang and stressed that “Tesla is ready to deepen cooperation with China and obtain more win-win results.”

The project’s initial plan is to produce more than 10,000 units of ultra-large-scale commercial electrochemical energy storage systems each year. Mass production is expected to start in the first quarter of 2025.

After the groundbreaking ceremony, Shanghai Lingang Economic Development Group and Tesla signed a contract for the first batch of these energy storage systems, according to Xinhua News Agency. The negotiation and signing of the Shanghai Energy Storage Gigafactory contract took only one month, once again setting a record for “Lingang speed”.

The new factory covers an area of ​​about 200,000 square meters with a total investment of about 1.45 billion yuan ($200.21 million), and aims to export products to overseas markets including the Asia region. -Pacific, to support a global “green future,” Xinhua reported.

According to Li Yong, senior researcher at the China International Trade Association, “despite the intensification of US crackdown on China’s new energy vehicle sector, Tesla has chosen to invest more in the Chinese market. “This highlights industry leaders’ strong confidence in China’s high-tech advancements and its vast market, meaning the Chinese market continues to hold strong attraction for foreign investment.”

Li said Tesla’s decision was based “on a favorable investment environment, promising growth prospects and profitable development trends.” “China has advanced energy storage technology and a stable and well-established supply chain, which are the main reasons for Tesla’s choice to establish its factories in Shanghai.”

“The continued transformation of related industries in China into high-tech sectors represents vast potential for foreign companies,” Li added.

In the Xinhua article, Tesla Vice President Tao Lin said the importance of Tesla’s energy storage business is now comparable to that of its famous electric vehicles. She also highlighted China’s strong industrial system, market potential, resilient economy and favorable business environment.

Tesla’s decision to build its second energy storage superfactory in Shanghai is also driven by the faster construction speed in China and global supply constraints related to lithium iron phosphate battery cells. Currently, only China has large-scale production capacity for this critical raw material in energy storage batteries, industry insiders said.

Experts noted that “this latest megaproject demonstrates the continued advancement of the US industrial giant’s investment and cooperation with China, serving as a strong rebuttal to the rhetoric that foreign investment is withdrawing from China and the hype over “overcapacity” around China’s new energy vehicle industry.”

Chinese officials have made concrete commitments that the country’s door to the outside world will open wider and wider. Chinese Premier Li Qiang promised during his meeting with Elon Musk that the Chinese market will always be open to foreign-invested companies.

The Chinese Ministry of Commerce said on Thursday that China will continuously promote high-level opening-up and that the Chinese government has a consistent attitude of inviting foreign companies to invest and creating a fair and predictable environment for them.

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