Tesla has bagged a deal to fund the construction of its humongous gigafactory in Shanghai. The amount has come in as a loan from Chinese banks. The loan came from multiple sources and the news was confirmed by Reuters on Monday.
The loan(s) will roll out over the course of 5 years and will be primarily used to build the planned facility and establish Tesla’s base of operations in the world’s most populated market — in terms of both electric cars as well as consumer numbers.
The Elon Musk lead company has been in China from some time. But now, Tesla is looking to establish a factory in the country to cut down on costs. The company announced its plan to build a gigafactory in Shanghai last year. This gigafactory, wherein Elon Musk broke ground in July this year, will focus on the production of Tesla’s Model 3 vehicle. The Model 3 produced locally is expected to have a cheaper price tag than other imported Model 3 units, thus helping company boost sales in world’s fastest growing electric vehicles market. The facility in Shanghai started in January but the company will continue expansion as other parts of the facility remain online and working.
While there is no official announcement on the regions the factory will cater to (except China of course), you can expect cars from this factory rolling out to other Asian markets as well, most likely India. China’s southern neighbour has already laid out aggressive electric mobility plans and Tesla has always been in the scheme of things.
With China and America being at odds with one another, companies are having a harder time on both sides. Tesla however, has been one of those rare companies that have withered the trade war storm rather comfortably.