Tesla has agreed with a group of Chinese banks on a new $1.4 billion (10 billion yuan) five-year loan for the automaker’s Shanghai-based Gigafactory, according to Reuters.
The report adds that the new loan will be used by Tesla to partly roll over an existing $500 million 12-month facility that’s due to be repaid on March 4, 2020, according to unnamed sources. The rest of the new $1.4 billion loan will be used on both the factory and Tesla’s China operations.
Related: Tesla Wants To Slash Model 3 Prices In China By 20 Percent
The group of Chinese banks reportedly include China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China and Shanghai Pudong Development Bank.
Tesla plans to build around 3,000 Model 3s a week at its newly inaugurated Shanghai plant in China
Tesla first broke ground on its Chinese factory in January, and now the new plant is already producing vehicles, aiming to churn out 1,000 Model 3 cars per week by the end of the year. Eventually the factory will produce 3,000 Model 3 cars on a weekly basis.
This is Tesla’s first manufacturing plant outside the United States and also China’s first wholly foreign-owned car factory, showcasing the local government’s shift in opening up its market.
The electric carmaker wants to boost its presence in the world’s biggest market and the Shanghai-based Gigafactory will shield the company from any tariffs and make its models more competitive there. In fact another recent report said that the company is aiming to cut prices of the locally-produced Model 3 by 20 percent or more next year.
As it stands now, a Tesla Model 3 in China is priced from 355,800 yuan ($50,800) but if the 20-percent cut takes place, prices should start at under 300,000 yuan ($42,800).
