On December 23rd, Tesla China and ICBC, AgBank, CCB and Pudong Development Bank agreed on up to 10 billion yuan in five-year loans. Tesla plans to use some of the money it borrowed to repay its previous $3.5 billion loan, with the rest to be used to develop its Shanghai plant and its Chinese operations. In March, Tesla borrowed a total of $521m (about Rmb3.5bn) from CCB, AgBank, ICBC and Pudong Development Bank, and the plant is not funded, as long as interest is paid.
The new loan will repay the previous 3.5 billion yuan, with the rest going to the Shanghai plant and its Chinese operations.
Under the terms of the lease with the Shanghai government, Tesla’s Shanghai plant will have to pay 2.23 billion yuan ($323 million) a year in taxes from the end of 2023 or it will have to return the land. The lease also stipulates that Tesla’s total investment in Shanghai will reach 14 billion yuan within five years, making it the largest single foreign investment case in the city.