Here’s a spot of good news for Tesla, which has of late appeared in the news for the wrong reasons. The electric carmaker has signed an agreement with the Shanghai government for an 860,000 square metre plot of land to build its first overseas Gigafactory, Tesla said in a Chinese social media post on Wednesday, reported by Reuters.

This development marks a key step towards Tesla and Elon Musk’s goal of making cars locally in China for China. A trade war is currently ongoing between the world’s two largest economies, and tariffs imposed by Beijing on US-made goods including cars have caused the price of Tesla’s EVs to rise.

In July, Tesla signed a deal with Shanghai authorities to build its first factory outside the US, with annual capacity of 500,000 cars. The move to manufacture in China would double the size of Tesla’s output and help lower the price of its cars in the world’s largest auto market, which has a big appetite for both EVs and premium cars.

“Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site,” said Robin Ren, Tesla’s VP of worldwide sales.

While Tesla did not mention the price it paid for the land, Reuters pointed out that the Shanghai Bureau of Planning and Land Resources said on Wednesday that a plot of land measuring 864,885 square metres had been sold at auction at a price of 973 million yuan ($140.51 million). Tesla, which started hiring for the new factory in August, had said that it would raise capital from Asian debt markets to fund the plant’s construction, which will cost around $2 billion.