Tesla has announced that it will again receive up to 4 billion yuan ($565 million) in working capital loans from a Chinese lender as it grows rapidly in China. According to the documents, the loan was made by Industrial and Commercial Bank of China (ICBC) China (Shanghai) Free Trade Pilot Zone Branch. As a lender, Tesla can withdraw funds from unsecured revolving loans totalling $4 billion or equivalent at any time.
It is important to note that these loans are for shanghai plant construction and production-related expenses only.
Prior to that, China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China and Pudong Development Bank had provided a total of 14.75 billion yuan in loans to Tesla. That means Tesla has accumulated about 20 billion yuan in loans so far.
Since the resumption of work on February 10 this year, production capacity at Tesla’s Shanghai plant has accelerated and is now ahead of the Spring Festival.
In its first-quarter results, Tesla said its Model capacity at its Shanghai plant is expected to increase to 4,000 vehicles per week in three years and 200,000 vehicles a year. This means that 40 percent of Tesla’s full-year target of 500,000 vehicles will be met by the Shanghai plant.
In January this year, the Shanghai plant officially launched the Model Y production project, the second phase of the project is also stepping up expansion, the total area of the Shanghai plant will be doubled in the future. Media reported that the second phase of the project may be completed earlier than expected, the domestic Model Y will be ahead of schedule.
At present, Tesla’s Shanghai plant parts localization rate is only slightly more than 30%, some experts predict that if Tesla’s localization rate further increased, the Model 3 price can be reduced to 200,000 yuan.