Tesla to tap new US$1.4 billion loan from Chinese banks for its Shanghai Gigafactory
- Tesla, which broke ground on the factory in January, has started producing its Model 3 electric vehicles from the Shanghai plant
US electric vehicle maker Tesla and a group of Chinese banks have agreed to a new 10 billion yuan (US$1.4 billion), five-year loan facility for the carmaker’s Shanghai car plant, three sources familiar with the matter said, part of which will be used to roll over an existing loan.
China Construction Bank (CCB), Agricultural Bank of China (AgBank), Industrial and Commercial Bank of China (ICBC) and Shanghai Pudong Development Bank (SPDB) are among the banks which have agreed to give Tesla the financial support, one source with direct knowledge said.
The Chinese banks earlier this year already offered Tesla a 12-month facility of up to 3.5 billion yuan, which is scheduled to be repaid on March 4 next year, according to a filing the carmaker made to the US Securities and Exchange Commission.
That new loan will be partially used to roll over the previous 3.5 billion yuan debt, according to the first source. The second source said the rest will be used on the factory and Tesla’s overall China operations.
The new loan’s interest rate will be pegged at 90 per cent of China’s one-year benchmark interest rate, the same as the 3.5 billion yuan loan, the first source said. This is a rate that China banks offer to their best clients.