Tesla makes deal with Chinese lenders for Shanghai Gigafactory The Wall Street Journal

By Maria Armental

Bloomberg News

A banner stands in front of cranes at the site of the Tesla Inc. manufacturing facility in Shanghai, China, on Jan. 7.

Tesla Inc. reached an agreement with lenders in China to receive as much as a half-billion dollars to invest in its Shanghai factory currently under construction.

The electric-car maker said in a securities filing Thursday that a syndicate of lenders agreed to provide up to 3.5 billion yuan ($521 million) for construction and production expenses at its so-called Gigafactory Shanghai. Tesla’s lenders in the agreement are China Construction Bank Corp. /zigman2/quotes/208974133/delayed HK:939 -1.14% , Agricultural Bank of China Ltd. /zigman2/quotes/200705246/delayed HK:1288 -1.71% , Industrial and Commercial Bank of China Ltd. /zigman2/quotes/201401473/delayed HK:1398 -0.59% , and Shanghai Pudong Development Bank Co. /zigman2/quotes/204296742/delayed CN:600000 -0.41% .

Tesla /zigman2/quotes/203558040/composite TSLA +4.03% said it entered into the agreement for an unsecured 12-month term loan earlier this month.

Construction of what is to be the first foreign-owned car plant in China in China — and Tesla’s first massive Gigafactory outside of the U.S. — began in January. The plant, at a roughly 210-acre site east of downtown Shanghai, is crucial to the California company’s goal to scale up production in China. Tesla expects to begin production of the Model 3 sedan for the local market by the end of this year, targeting 10,000 vehicles a week, and mass production by next year.

An expanded version of this report appears on WSJ.com.

Also popular on WSJ.com:

Martin Shkreli steers his old company from prison — with contraband cellphone.

Philadelphia is first U.S. city to ban cashless stores.

/zigman2/quotes/208974133/delayed