ZCZC
BCN-18
CHINA-US-AUTO-TESLA
Tesla gets $520 mn funding for first Chinese plant
SHANGHAI, March 8, 2019 (BSS/AFP) – Electric carmaker Tesla has won more
than $520 million in loans from Chinese banks to build its first overseas car
plant near Shanghai, 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 will 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 Elon Musk was in China in January for the
groundbreaking of the factory, where he said he planned to approach local
banks for the money to get the plant built and into production.
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 impact
of trade tensions between the US and China, as well as reduce its production
costs.
According to a regulatory filing, Tesla has secured $521 million from four
domestic banks — the Industrial & Commercial Bank of China, the Chinese
Construction Bank, Agricultural Bank of China, and the Shanghai Pudong
Development Bank.
Tesla shares rose more than two 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 in
2018.
Sales of electric vehicles and hybrids have meanwhile continued to swell –
– jumping 62 percent last year — but only make up just four percent of
overall sales in China.
Tesla remains in the lead, but is followed by three Chinese brands —
BAIC, BYD and Zotye — according to analysis provider Jato Dynamics.
BSS/AFP/HR/1005