An aerial drone photo taken on Dec 15, 2024 shows a view of Tesla's Megafactory in East China's Shanghai. [Photo/Xinhua]
SHANGHAI — Tesla's energy storage Megafactory in Shanghai has begun trial production, serving as a good example of cooperation between China and the United States in addressing climate challenges.
The new plant is dedicated to manufacturing Megapacks, Tesla's energy-storage batteries, with mass production expected to commence fully in the first quarter, Tesla China told Xinhua News Agency on Tuesday.
The facility was built with an initial annual production capacity of 10,000 units, equal to around 40 gigawatt-hours of energy storage, according to the company.
The project is Tesla's second plant in Shanghai, underscoring the US company's commitment to investing in the world's second-largest economy, its confidence in China's manufacturing capabilities and the strengthened economic ties between the two countries in the new energy sector, said Wu Qisheng, a researcher at the Shanghai Academy of Social Sciences.
Trial production was launched just seven months after construction began, setting a record for "Tesla speed" in China, with the Shanghai Gigafactory, Tesla's first plant in the country's eastern financial hub, having been built and inaugurated within a year in 2019.
Covering an area of approximately 200,000 square meters, the new plant represents a total investment of about 1.45 billion yuan ($198.7 million), according to the administration of the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone.
The Megafactory is the first of its kind that Tesla has built outside the US.
Lauding China's efforts to develop the new energy industry, including the energy storage sector, Tesla Vice-President Tao Lin said in May that the country offers a complete industrial chain, vast market potential and a production and business environment crucial for enterprise growth.
As a global renewables powerhouse, China is a major market for energy storage. In 2023, its installed renewable energy capacity surpassed its thermal power capacity for the first time, accounting for approximately 50 percent of all additions to the global renewable energy capacity.
Wu Xinbo, head of the institute of international studies at Fudan University, credited the rapid construction of Tesla's new factory to China's world-class infrastructure capabilities and the exceptional business environment offered by Shanghai and the broader Chinese market.
Tesla has not been alone in strengthening its commitment to the Chinese market. A record 52,379 foreign-invested companies were established in China in the first 11 months of 2024, an 8.9 percent increase from the previous year. In November, foreign direct investment in actual use in the Chinese mainland also saw a 6 percent year-on-year rise, data from the Ministry of Commerce show.
In a bid to help foreign investors leverage its supply chain, market potential and innovation strengths, China has made significant strides in its opening-up.
Throughout 2024, the Chinese government rolled out a range of key measures to foster a more welcoming environment for overseas investors. These measures included expanding access to key industries and launching pilot programs to facilitate foreign investment.
A key move was the rollout of the 2024 national negative list for foreign investment, effective Nov 1, which removed all market access restrictions for foreign investors in China's manufacturing industry. This unprecedented breakthrough overcame the final hurdles that global manufacturers face when entering a pillar industry in China.
In October, the 3-millionth vehicle produced by Tesla's Gigafactory in Shanghai rolled off the assembly line. Of the total, one-third have been sold to markets outside the Chinese mainland, including Europe and the Asia-Pacific, the company said.
The first three quarters of 2024 saw the Shanghai factory deliver 675,000 vehicles, accounting for over half of the company's global deliveries during the period.
"China-US economic and trade relations are fundamentally mutually beneficial. Attempts at 'decoupling' or severing industrial and supply chains will harm US industries," Wu said, emphasizing that half of Tesla's global vehicle production capacity is based in Shanghai, with China playing a dominant role in the new energy vehicle supply chain.
Tesla's two Shanghai factories showcase the mutual benefits of China-US cooperation, demonstrating that decoupling is impractical as US investors cannot afford to forgo the vast opportunities of the Chinese market, he said.
Xinhua - China Daily
