Tesla gets $708m in loans for first factory in China

Tesla enters into agreement with Chinese lenders for Gigafactory

Tesla's "Gigafactory" in Shanghai has secured loans of up to 3.5 billion yuan ($520 million) from Chinese banks, according to the company's filing to the Securities and Exchange Commission (SEC) in the US on Thursday.

Tesla has been focusing a fair amount of Model 3 production on foreign markets, especially Europe and China.

The fresh borrowing follows Tesla's largest-ever debt payment last week.

Tesla (NASDAQ:TSLA) is getting as much as $520M in loans from Chinese banks to build a vehicle and battery factory plan in China, it disclosed in a regulatory filing.

Tesla said on Thursday that it signed an agreement with Chinese banks for a loan of up to $521 million to build its first overseas Gigafactory in Shanghai.

The company broke ground on the factory in January. For dollar-denominated loans, the rate is 1% more than Libor.

Tesla's China Gigafactory in 210-acre east of Shanghai will ramp up production of the Model 3 sedan for China market with 10,000 vehicles a week.

Tesla has said that the Gigafactory will cost around two billion USA dollars.

It is more evidence of deteriorating demand in the world's largest auto market, which past year contracted for the first time in two decades as the economy slowed and a trade war weighed on consumer spending.

The funding, announced yesterday, 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 vehicle market.

Localizing vehicle production will help Tesla to minimize the impact of the U.S.

Construction of the factory began in January and CEO Elon Musk said it will be ready as soon as this summer. A Shanghai city government official stated on Wednesday the factory is anticipated to be finished in May.

The electric-car company has said the Gigafactory will cost around $2 billion, and could help the company buffer against the ongoing trade war between the U.S. and China.

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