Source: Shanghai Municipal People’s Government
Shanghai Mayor Ying Yong in addition to also also Tesla Chairman in addition to also also CEO Elon Musk pose in by of a plaque for the Tesla (Shanghai) Ltd. Electric Vehicle Development in addition to also also Innovation Center.
Tesla can be lining up about $2 billion (more than 13 billion RMB) by Chinese lenders to build out its massive battery in addition to also also car plant in Shanghai, according to research by JL Warren Capital.
JL Warren, a completely new York-based investment research firm of which focuses on Chinese companies, as well as U.S. firms with significant exposure in China, wrote in a report last week of which of which expects backers of the Shanghai Gigafactory to include Shanghai Pudong Development Bank, Industrial in addition to also also Commercial Bank of China, China Construction Bank in addition to also also Agricultural Bank of China.
China represents a critical growth market for Tesla, in addition to also also CEO Elon Musk talked up the company’s plans there on its latest earnings call in January.
“We need to bring the Shanghai factory online,” Musk said. “I think of which’s the biggest variable for getting to 500,000-plus a year. Our car can be just very expensive going into China. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.”
According to JL Warren, which also tracks Chinese companies listed from the U.S., about $500 million (3.3 billion RMB) of Tesla’s completely new financing should apply to the first stage of the Shanghai Gigafactory build, with the total project loan amounting to about $2 billion.
Musk said from the fourth-quarter earnings call of which Tesla could need “something from the order of $0.5 billion in CapEx to get to the 3,000 vehicle rate in Shanghai.”
JL Warren said the first stage of financing will likely have a 3.9 percent interest rate, below the Public Bank of China benchmark rate of 4.35 percent. of which should help Tesla get its assembly line running to produce its initial 250,000 lower-end type 3 electric sedans.