Sat, Mar 09, 2019 - Page 10 News List

Tesla receives funding for first Chinese plant

AFP, SHANGHAI

Electric carmaker Tesla Inc has won more than US$520 million in loans from Chinese banks to build its first overseas car plant near Shanghai, which would make it the first foreign automaker to wholly own a factory in China.

The funding, announced on Thursday, is an important boost for the California-based firm, which has been in negotiations with Beijing for years over building the plant in the world’s biggest electric car market.

The US giant plans to make its Model 3 sedans at the factory — initially targeting 3,000 cars a week before ramping up annual production to 500,000 — which it plans to have operational by the end of the year.

Tesla chief executive officer Elon Musk is betting on China’s growing market for electric cars as Beijing pushes the industry away from fossil fuel vehicles.

Manufacturing locally is expected to help Tesla avoid some of the effect of trade tensions between the US and China, as well as reduce its production costs.

According to a regulatory filing, Tesla has secured US$521 million from four domestic banks — the Industrial & Commercial Bank of China (中國工商銀行), the Chinese Construction Bank (中國建設銀行), the Agricultural Bank of China (中國農業銀行) and the Shanghai Pudong Development Bank (上海浦東發展銀行).

Tesla shares rose more than 2 percent in after-hours New York trading.

China is by far the world’s biggest car market and sales there have been on an upwards trajectory for years, although they slipped 2.8 percent last year.

Sales of electric vehicles and hybrids have meanwhile continued to swell, jumping 62 percent last year, but only make up just 4 percent of overall sales in China.

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