Tesla Approaching China
Tesla, one of the biggest names in the automobile industry, has finally decided to move swiftly and expand outside the United States. The company that has revolutionized the electric car market has decided to march towards the world’s biggest auto market— China.
Tesla was already in the news for the new gigafactory coming-up in Shanghai. It has recently secured a term loan facility of up to 9 billion Yuan ($1.29 billion) on Thursday according to a regulatory filing. The makers have also signed another agreement for an unsecured revolving term loan facility of up to 2.25 billion Yuan. Tesla said that both these loans will be used for the Shanghai plant.
The Lenders Involved
A group of Chinese banks is involved in this procedure. According to the filing, China Construction Bank Corp, Agricultural Bank of China, Shanghai Pudong Development Bank and Industrial and Commercial Bank of China are the lenders. This loan will be used in construction and production in the Shanghai plant. However, besides this, the loan might also be used to repay the 3.5 billion Yuan debt. The debt was due to be repaid on March 4, 2020.
The Positive Consequences
Tesla is unarguably the king of the electric car market. With increasing demand across the world, it has decided to increase the number of manufacturing plants thereby starting one in China. This surely looks to be a huge step regarding the forging of the electric car market across the world. With this deal, the tariffs imposed on U.S. manufactured cars might be reduced. Tesla’s stock also has touched record highs this month, gaining another 1.3% on Thursday.