According to a later report by automotive media Auto, BYD subsidiary Fodi Battery reached a supply agreement with Tesla in March this year for its Shanghai energy storage factory, and will supply energy storage cells to Tesla in the first quarter of next year. The first supply of battery cells in this factory has been determined to be from CATL, and the second supply is from Fodi, with the latter's supply share exceeding 20%.
Tesla's energy storage business model involves purchasing battery cells from suppliers and assembling them into a complete set of energy storage systems, such as Megapack, an energy storage solution for large businesses, and Powerwall, an energy storage system for households. Megapack contributes approximately 80% of the business's revenue. Each Megapack unit can store over 3.9MWh of energy, meeting the hourly electricity demand of 3600 households.
The Shanghai Energy Storage Factory is Tesla's first energy storage super factory project outside of the United States. Currently, only the Megapack product line is planned, with a designed annual production capacity of 40GWh. Freddy's orders correspond to a supply of over 8GWh in full production. According to industry prices, the annual order value is approximately 3.5 billion yuan.
The factory started construction in May this year and is scheduled to complete mass production in the first quarter of 2025. Part of its energy storage products will be supplied to the domestic energy storage market, while the other part will be supplied overseas. On the day of construction, Shanghai Lingang Group signed the first batch of Megapack China orders with Tesla, purchasing a total of eight Megapacks.
Ningde Times was once Tesla's only supplier of energy storage cells, or for the sake of balancing costs and gaining more bargaining power, Tesla has decided to introduce Ford as a new partner. People close to BYD say that BYD has provided Tesla with the best price, which is close to the cost line.
According to data from third-party analysis firm InfoLink, CATL and Freddie ranked among the top two in the global energy storage cell market last year, with CATL's market share exceeding 35% and Freddie's share at 13%.
With disruptive concepts such as advanced autonomous driving and production process reform, Tesla once led the global electric vehicle industry. However, in recent years, its lackluster pace of innovation has led it to be surpassed by overseas competitors, resulting in its first year-on-year decline in nearly four years in the first quarter of this year. The company's stock price has fallen by nearly 30% this year, underperforming the S&P 500 index.
Tesla is actively seeking a second growth curve that is enough to boost the capital market. The affordable electric vehicle model is still pending, and fully autonomous driving has not yet been implemented. Among many uncertainties, energy storage has become a new growth point for the company. In the first quarter, Tesla's power generation and energy storage business revenue increased by 7% year-on-year, and gross profit increased by 140% year-on-year, setting a historical high.
Tesla's ultimate plan is to integrate key technologies in the fields of electric vehicles, energy storage products, artificial intelligence, and robotics, forming an integrated closed loop. Electric vehicles are the fundamental carrier for application. Musk has publicly stated that in the long run, Tesla's energy business will be larger than its automotive business, or at least comparable in scale.
A middle-level energy company told Interface News that energy storage can improve the utilization and stability of electricity, and to some extent determine the upper limit of the new energy industry. At present, there is overcapacity and low project utilization in some aspects of the domestic energy storage industry. The landing of Tesla's Shanghai energy storage factory may accelerate the reshuffle and promote the industry's positive development in competition.
In addition to the Shanghai energy storage factory, Tesla will also collaborate with CATL to build an energy storage battery factory in Nevada this year. According to foreign media reports, in order to avoid government censorship and potential criticism and attacks, the factory will be fully controlled by Tesla, and CATL will only be responsible for installing equipment and not participating in production and operation.
It is worth noting that Tesla's new partner, BYD, the parent company of Ford Battery, is also creating revenue sources outside of the automotive business through energy trading. Energy storage is currently the fastest-growing business of BYD Group. According to official information from Freddy, the year-on-year sales growth rate of energy storage batteries exceeded 136% last year.