NEW YORK, June 20, 2025 (BSS/AFP) - Tesla announced Friday that it signed an agreement to build its first grid-scale energy storage power station project in mainland China.

The project will help with the flexible adjustment of grid resources, and "effectively solve pressures relating to urban power supply," Tesla said in a post to the Chinese social media platform Weibo.

"After completion, this project is expected to become the largest grid-side energy storage project in China," Tesla added.

Such energy storage systems help to enhance stability in the electricity grid at a time when there are greater supplies of solar and wind power.

Chinese media outlet Yicai reported that Tesla Shanghai, Shanghai authorities and China Kangfu International Leasing Co. held a signing ceremony Friday for the project.

It added that the deal involved investments of 4 billion yuan ($560 million).

The contract comes at a moment of tension between Washington and Beijing, with the two sides yet to hash out a long-term trade agreement following tariffs announced by President Donald Trump.

China and the United States negotiated a "framework" agreement in London earlier this month following two days of marathon talks.