Tesla to build China’s biggest grid battery plant in $556M deal

Tesla has entered a $556 million agreement to build China’s largest grid-scale battery storage facility, marking its first utility-scale energy storage project in the country. The deal, signed with the Shanghai municipal government and China Kangfu International Leasing, comes amid ongoing U.S.–China trade tensions and reflects Tesla’s strategic push into China’s rapidly growing energy storage market. The new facility will use Tesla’s Megapack battery systems, industrial-scale units capable of delivering up to one megawatt of power for four hours, and is expected to act as a “smart regulator” to stabilize urban electricity supply, addressing peak demand and ensuring grid reliability. This move intensifies Tesla’s competition with dominant Chinese battery manufacturers like CATL and BYD, with CATL currently holding a 40% market share and supplying cells for Tesla’s Megapacks. China is aggressively expanding its grid-scale battery capacity, having raised its target for battery-powered electricity storage to 40 gigawatts by 2025, driven by the