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Tesla aligns about $ 2 billion in loans for Shanghai Gigafactory



Shanghai Mayor Ying Yong and Tesla President and CEO Elon Musk pose in front of a plaque for the Tesla (Shanghai) Ltd. Electric Vehicle Development and Innovation Center.

Source: Shanghai Municipal People's Government

Shanghai Mayor Ying Yong and Tesla President and CEO Elon Musk pose in front of a plaque for the Tesla (Shanghai) Ltd. Electric Vehicle Development and Innovation Center.

Tesla will align about $ 2 billion (more than RMB 13 billion) from Chinese lenders to build its huge battery and car factory in Shanghai, according to a study by JL Warren Capital.

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China is a critically growing market for Tesla, and President and CEO Elon Musk detailed the company's plans in the country in its latest call for results in January.

"We have to put the Shanghai factory online," said Musk. "I think it's the most important variable to reach more than 500,000 people a year.Our car is very expensive to go to China.We have import duties, we have transportation costs. we have higher labor costs. "

According to JL Warren, who also tracks Chinese companies listed in the United States, about $ 500 million (RMB 3.3 billion) of the new Tesla financing is expected to apply to the first phase of Shanghai Gigafactory's construction, of which the total loan is about $ 2 billion.

Musk said during the fourth quarter results call that Tesla would need "something in the order of $ 0.5 billion in CapEx to reach the rate of 3,000 vehicles in Shanghai".

JL Warren said that the first stage of financing would probably have an interest rate of 3.9%, lower than the reference rate of the Public Bank of China of 4.35%. This should help Tesla put into operation its assembly line to produce its 250,000 low-end model 3 electric sedans.


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