Elon Musk’s Tesla to build new battery factory in China
Christopher Hutton
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Elon Musk is expanding his relationship with China by building a new factory for Tesla’s large-scale batteries in Shanghai.
The company announced its plans to construct batteries on Sunday in agreement with the Chinese government, according to the state newspaper China Daily. The factory will produce more than 10,000 Megapacks a year. The plant will break ground in the third quarter of 2023. It’s the latest move by Musk to invest in China’s economy.
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“Five years ago, the Tesla Gigafactory helped Shanghai become a hub for the new energy vehicle industry,” Shanghai Deputy Secretary-General Zhuang Mudi said. “Today, we witness the signing of Tesla’s energy storage Megafactory, which will definitely become an important driving force in promoting the development of energy storage in Shanghai and its low carbon transition.”
“Tesla will continue to invest in China through a wider range of products and services to encourage more partners to join forces in accelerate the world’s transition toward more sustainable energy,” the company wrote in a newsletter.
Tesla currently has a Gigafactory in Shanghai used to construct Model 3 cars. The factory is designed to build an estimated 20,000 cars a week.
Musk has spoken in favor of China and the Chinese Communist Party in the past and has appeared at diplomatic events with CCP leaders. China’s ambassador to the United States posted pictures of him riding with Musk in a Model S Plaid in March.
Musk also sought business partners in China through an August 2022 op-ed in a CCP-sponsored magazine. He told readers that he wanted to “maximize the use of technology to help achieve a better future for humanity” through investments in companies such as Tesla.
Musk said in an interview that China is “probably going to have an economy two to three times the size of the United States” and that Tesla has a “good relationship.”
The Chinese market accounts for 40% of all Tesla sales, according to data published by the China Passenger Car Association.
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China’s leadership has expressed its fondness for Musk and his views. Musk is reportedly “key” to Chinese leader Xi Jinping’s plan to make the country the world’s future industrial center, with the Wall Street Journal stating that Xi viewed Musk “as a technology utopian with no political allegiance to any country” and saw Tesla “as a spearhead that could make China a power in new-energy cars.”
Members of the House have also proposed delivering Starlink, Musk’s satellite-based internet provider, to Taiwan. If approved, it could complicate Musk’s relationship with China.