Elon Musk's Tesla To Build First Grid-Scale Energy Storage Site In China With $550 Million Investment
Tesla Inc. has signed a $550 million deal to build its first grid-scale energy storage site in Shanghai, utilizing Megapack batteries. This agreement, made with the Shanghai local government and China Kangfu Leasing Co., comes amid improving U.S.-China trade relations. Despite ongoing restrictions on military-use rare-earth magnets, Tesla's sales in China are thriving, with the Model Y SUV being the best-selling SUV in May.
Tesla Inc. TSLA has signed an energy storage deal with Shanghai amid trade uncertainty between Washington and Beijing.
What Happened: Tesla will set up its first grid-scale energy storage station in Shanghai, using the company's Megapack batteries, Reuters reported on Friday.
The deal involves an investment of over 4 billion yuan, or $550 million, according to the report. Tesla penned the deal with the Shanghai local government, as well as China Kangfu Leasing Co., a financial services company dealing in clean energy, among other things.
Why It Matters: The deal comes in as trade talks between the U.S. and China have returned positive news as the two sides met in London recently to discuss tariffs and export restrictions.
However, the truce has left some unanswered questions as the restrictions on critical rare-earth magnets for military-use exports are still in place, which U.S. military suppliers require to manufacture fighter jets and other equipment.
Elsewhere, Tesla has been seeing a surge in sales in China as the company's Model Y SUV was the best-selling SUV in China with over 24,700 sales in May.
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