Tesla gets a $1.29 billion loan from Chinese banks for its Shanghai plant

You might be aware of the fact that Tesla has entered the Chinese automobile industry with its Model 3 which is the first electric car from Tesla outside its home country. For this reason, Tesla has also developed a manufacturing plant in Shanghai where the Model 3 units sold in China are made. Now, we know that Tesla needs to have some huge investments in order to get started in China and even its US operations are not enough to fund its Chinese business. For this reason, we were aware that Tesla is looking to get loans from Chinese banks based on the business and its Shanghai factory.

Now, a new report from CNBC reveals that the US electric car manufacturer has raised a total of $1.29 billion in loans from Chinese banks. According to a regulatory filing, Tesla has reached this agreement with lenders in China for a secured term loan of 9 billion Yuan. Apart from this agreement, Tesla says that an unsecured revolving loan facility is also signed by them which is up to 2.25 billion Yuan and also that both these loans will be used for its Shanghai facility only.

Not only is the loan believed to be used for building the factory facility and also making cars but it might also be used to repay loans of 3.5 billion yuan which is due to be repaid on March 4 of next year. Tesla’s decision to build a factory in China is also because it wants to avoid higher import tariffs imposed on U.S.-made cars. Apart from that, Reuters also reported: “Tesla and a group of China banks had agreed to a new 10 billion yuan, five-year loan facility for the automaker’s Shanghai car plant”. It is worth noting that Tesla’s launch in China has gone as per plan so far and the company is seeing better-than-expected sales every month.