Banks in China are ready to help finance the Gigafactory 3

According to the latest news, Tesla just secured financing for the Gigafactory 3 in Shanghai from Chinese banks. The bank loans are reportedly for $521 million.

The loans come from four banks and will mature in March 2020.

  • China Construction Bank Corp.
  • Agricultural Bank of China Ltd.
  • Industrial & Commercial Bank of China Ltd.
  • Shanghai Pudong Development Bank Co.
According to Bloomberg, "Tesla also amended a separate asset-backed credit agreement, increasing how much it can borrow by as much as $700 million.".

It's probably not the last round to complete the factory, as expected total investment is to be about $2 billion.

The facility is set to produce 3,000 Model 3 per week at some point in the future.

Bloomberg notes also that Tesla just paid $920 million in convertible bonds, which matured on March 1:

"The fresh borrowing follows Tesla’s largest-ever debt payment last week. Settling the $920 million convertible bond that matured March 1 taxed the company’s balance sheet, which had about $3.7 billion in cash and equivalents at year-end."

Tesla Gigafactory 3 facts:

  • location: Shanghai, China
  • wholly-owned subsidiary (not joint venture)
  • construction was started in January 2019
  • initial construction should be completed by the end of summer
  • production of cars should start in second-half of 2019 (volume production from 2020)
  • expected total investment: about $2 billion
  • purpose: production of affordable versions of Model 3/Model Y for greater China region (higher cost versions of 3/Y and all S/X to be produced in the U.S.)
  • battery packs will be assembled using lithium-ion cells from various suppliers, including Panasonic
  • expected volume: 500,000 per year
Source: Bloomberg