Tesla To Deploy Energy Storage Station In China With $556M Investment, Says Report

Tesla's first grid-scale battery storage station in China, using its megapack batteries, will be located in Shanghai.

According to a Reuters report that cited China's Yicai Global, Tesla, China Kangfu International Leasing Co., and the Shanghai local government signed a deal on Friday, involving an investment of RMB 4 billion ($556.4 million).

The megapack is Tesla's massive energy storage solution. The powerful battery is capable of storing 3.9 MWh of energy per unit, or enough to power an average of 3,600 homes for one hour, according to the company.

On Stocktwits, however, retail sentiment around TSLA is trending in the 'bearish' territory.

Tesla's first megapack factory in China started production in February. The factory has a current annual capacity of 20 GWh and the ability to double it. The factory produced 100 megapacks through the end of March.

The company's other megapack factory is located in Lathrop, California, with the capability of producing 10,000 Megapack units annually, equivalent to 40 GWh of energy storage.

Megapack is key to Tesla's energy generation and storage segment. In the first quarter alone, the segment recorded $2.73 billion in revenue, marking a growth of 67% year-on-year, and accounting for 14% of the company's total revenue, while its automotive segment revenue slumped 20% YoY.

In April, Tesla stated that it sees the growth of AI only increasing the need for energy storage, while higher tariffs may cause market volatility and near-term impacts on supply and demand.

TSLA stock is trading over 2% higher in pre-market on Friday.

The stock is down 15% year-to-date but up over 77% in the past 12 months.

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