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Tesla to build new battery plant in Shanghai amid US-China tensions

9 April: Tesla increases China investment with new Shanghai battery plant Tesla Inc. is expanding its presence in China with a new factory in Shanghai that will produce its Megapack energy storage product, according to a report by Xinhua, a Chinese state media outlet. The new facility will add to Tesla’s existing electric vehicle plant in Shanghai, which accounts for more than half of its global output.

The announcement was made at a signing ceremony in Shanghai on Sunday, attended by Tesla’s senior vice president of automotive Tom Zhu, vice mayor of Shanghai Wu Qing, and other government officials. Tesla vice president Tao Lin signed the contract for the project.

The construction of the new battery plant is expected to start in the third quarter of this year and the production will begin in the second quarter of 2024. The factory will initially produce 10,000 Megapacks per year, equivalent to around 40 GWh of energy storage, and the products will be sold worldwide.

The Megapack is a large-scale battery that can help stabilize power grids by storing excess energy. Tesla claims that each Megapack can power an average of 3,600 homes for one hour.

Tesla’s investment in China comes at a time of rising tensions between Beijing and Washington over various issues, such as trade, technology, and human rights. However, some foreign companies, such as France’s Airbus SE, have also announced plans to increase their production capacity in China.

China is a crucial market for Tesla, as it is the world’s largest consumer of electric vehicles. Tesla’s Shanghai EV plant, which it owns fully, produced nearly 711,000 cars last year. The company has received strong support from the Shanghai government since it set up its first overseas plant in early 2019.

However, Tesla has also faced some challenges in China, such as delays in expanding its Shanghai EV plant due to data concerns related to its Starlink satellite internet project, and customer complaints about price cuts and quality issues.

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