Tesla has taken a significant step into China’s energy sector by signing an agreement on Friday to establish its first grid-scale energy storage power station in mainland China.
According to a post shared on Weibo, Tesla stated that the new facility would support flexible regulation of the grid and “effectively solve pressures relating to urban power supply.”
“After completion, this project is expected to become the largest grid-side energy storage project in China,” the company added.
These types of energy storage installations are becoming increasingly vital, particularly as the grid integrates higher volumes of renewable energy like wind and solar. They offer much-needed stability and reliability.
Chinese financial news outlet Yicai reported that the signing ceremony was attended by Tesla Shanghai, Shanghai municipal officials, and representatives from China Kangfu International Leasing Co.
The deal, according to the report, involves an investment of 4 billion yuan (approximately $560 million).
The agreement was finalized amid ongoing trade friction between the United States and China.
The two global powers have yet to reach a comprehensive trade deal following tariff measures initiated by the United States President, Donald Trump.
However, both sides recently made headway by negotiating a “framework” agreement during two days of intensive talks in London earlier this month.