A regulatory filing Thursday by Tesla, the US electric car maker, showed it had reached an agreement with a number of Chinese banks on a Rmb9bn ($1.29bn) guaranteed term loan arrangement,media reported. Tesla also said it had signed an unsecured revolving loan arrangement of up to Rmb2.25bn, adding that both loans would be used at its Shanghai auto plant.
China Construction Bank, Agricultural Bank of China, Shanghai Pudong Development Bank and Industrial and Commercial Bank of China are all listed as lenders, according to regulatory documents. In addition to construction and production expenses for the Shanghai plant, the loan could also be used to repay rmb3.5bn due on March 4 next year.
Earlier this year, Chinese banks offered Tesla a 12-month loan worth up to Rmb3.5bn to repay it on March 4, 2020, according to documents filed with the Securities and Exchange Commission.
Earlier, sources said the new loan will be the same as the $3.5 billion loan rate, or 90 per cent of the one-year rate announced by the central bank. This is the interest rate that Chinese banks offer to their best customers.
The Shanghai plant is Tesla’s first manufacturing base outside the U.S. and is at the heart of its strategy to boost sales and avoid higher import tariffs in China, the world’s largest auto market.
People familiar with the matter revealed a few days ago that Tesla and a number of Chinese banks had agreed to a Rmb10bn five-year loan for Tesla’s Shanghai plant.
In January, Tesla’s Shanghai plant broke ground and is now producing cars. The plant aims to produce at least 1,000 Model 3 cars a week by the end of the year. The Shanghai plant is Tesla’s first auto production base outside the U.S. and is key to boosting sales in China, the world’s largest auto market. The Shanghai government also backed Tesla’s project, which would be China’s first wholly foreign-owned car factory, reflecting the government’s shift to an open car market.