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Business

Tesla enters into loan agreement with Chinese banks to finance new Gigafactory




Tesla said on Thursday that it signed an agreement with Chinese banks for a loan of up to $ 521 million to build its first foreign Gigafactory in Shanghai.

The electric car company has said that Gigafactory will cost around $ 2 billion and could help the company counteract the ongoing commercial war between the US and China.

Construction of the factory began in January, and CEO Elon Musk has said it could be ready this summer. A Chinese government representative said Wednesday that the factory is expected to be completed in May, Reuters reported.

Earlier, Musk said the Shanghai factory will produce model 3 sedans and its upcoming model Y SUV for the Chinese market. The CEO said that model 3s could start rolling off their assembly line by the end of the year. lon Musk's security approval is being reviewed by the Pentagon after he smoked marijuana on Joe Rogan's podcast in September

The new factory would double the size of Tesla's global production capacity, Reuters said.

Tesla also has Gigafactories in the Nevada deserts and in Buffalo, New York. The Shanghai factory will be the first factory in China that is wholly owned by a foreign company.

The loans were declared in a filing regulation, which also said the company changed its own property-based credit agreement that expands how much Tesla can borrow up to $ 700 million, Bloomberg reported. The news expense also extended Tesla and its funding partners to the due date of some of its commitments until 2023.

The latest funding moves between Fremont, California-based Tesla and Chinese banks are coming as the ongoing trade war between the United States and China continues.

According to a new study by economists in the New York Federal Reserve, Princeton and Columbia, the trade war cost US consumers and importers about $ 1[ads1].4 billion a month by the end of 2018.

Bill Bostock contributed to this report.



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