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Tesla May Be Only Big Winner in U.S. Batteries Bound for China

Bloomberg logoBloomberg 1/15/2020 David R. Baker
© Fabrice Coffrini/AFP/Getty Images  

Tesla may be the single largest beneficiary of a provision tucked into the trade deal between the U.S. and China.

As part of the accord signed Wednesday, China will import more energy storage systems and parts from the U.S. this year and next. Tesla’s Gigafactory in Nevada is by far the largest battery plant in the U.S., representing 42% of nationwide production, according to data from BloombergNEF. No other manufacturer in America comes close to its capacity.

a screenshot of a cell phone: China's Battery Dominance© Bloomberg China's Battery Dominance

While most of Tesla’s batteries go into electric cars, the company has been expanding its business of building massive battery packs that can store electricity for large-scale power grids. In fact, the Palo Alto, California-based company is negotiating a contract to supply cobalt -- a key component in lithium-ion batteries -- to its newly opened Shanghai Gigafactory, according to people familiar with the matter.

China is, by far, the world’s biggest battery producer, with factories capable of cranking out 275,560 megawatt hours-worth of cells. The U.S. trails as a distant second, at 33,116 megawatt hours, according to BloombergNEF data.


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