Tesla announced that it has signed an agreement to build its first grid-scale energy storage project in mainland China.

According to a post by Tesla on Chinese social media platform Weibo, the project will support flexible management of grid resources and “effectively solve problems related to urban power supply.”

The company added that upon completion, this facility is expected to become the largest energy storage project connected to the power grid in China.

These energy storage systems help increase grid stability, especially in conditions of increased solar and wind power generation.

Chinese media portal Yicai reported that the signing ceremony was held on Friday by Tesla Shanghai, local authorities in Shanghai, and China Kangfu International Leasing Co.

The deal involves an investment of 4 billion yuan (about $560 million).

This agreement comes at a time of heightened tensions between Washington and Beijing, with the two sides still unable to reach a long-term trade agreement following the tariffs imposed by President Donald Trump.

Earlier this month, China and the United States held talks in London, after which a framework agreement was reached following two days of intense negotiations. | BGNES, AFP