Elon Musk, Tesla CEO/Bloomberg
In January, Elon Musk, the Chief Executive Officer of Tesla estimated that EV company required around $500 million to get the plant built and production ramped up to 3,000 Model 3s a week.
Sunday 10, March 2019
(Bloomberg) --Tesla has secured around $521 million in loans from Chinese banks to build a vehicle and battery factory in the country, putting the carmaker a step closer to producing Model 3 sedans at its first overseas plant.
In a statement, Tesla stated that the loan was provided by China Construction Bank Corporation, Agricultural Bank of China as well as Industrial & Commercial Bank of China and Shanghai Pudong Development Bank Company.
Tesla also amended a separate asset-backed credit agreement, increasing how much it can borrow by as much as $700 million.
The total cost will be higher, with the company planning to tap local banks for a majority of the funding.
After years of negotiations with Chinese authorities to become the first foreign automaker to wholly own a manufacturing facility in the country, Tesla broke ground on the outskirts of Shanghai on 7 January. Musk has said the company plans to start battery and Model 3 production at the factory by the end of the year.
Beginning local production in China is key for Tesla to reduce the costs of its cars in what is the world’s largest market for electric vehicles. Battery-powered autos have been a rare bright spot amid the broader market’s slowdown. Local manufacturing also will help the company sidestep any re-escalation of trade tensions between the US and China.
In its filing, Tesla said it amended and restated its asset-backed loan credit agreement to increase the total lender commitments by $500 million to about $2.4 billion. The pact also permits the company to obtain up to $200 million in additional commitments, and extend the term of most of the total commitments to 2023.