Tesla gets $520 mn funding for first Chinese plant

Share

An industry source told TechNode that the National Development and Reform Commission (NDRC) stopped Shanghai authorities from approving the plant.

Another source at a rival EV company also alluded to the government's influence on the fate of Nio's plant.

SCG is one of the world's largest construction companies.

Li Bin, CEO and founder of Nio, said that Tesla's large-scale price cuts will harm the brand and Nio will not follow suit. The Shanghai factory will be the first auto plant in China that's entirely owned by a foreign company.

Tesla Inc. said it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan (US$521 million) for the electric carmaker's Gigafactory in Shanghai, and secured new commitments from banks that could be used for investments in the United States and elsewhere, Reuters reports.

The change in plans represent a large change in direction for the company which had just started production of its first vehicle, the ES8 SUV a year ago. But it is willing to further promote the Chinese EV sector with Chinese carmakers. Byton hopes to open its factory in the eastern Chinese city of Nanjing in May.

More news: AP, T'gana to go to polls on April 11..
More news: A third person may have been ‘cured’ of HIV
More news: 'SHE SAID YES': Jennifer Lopez and Alex Rodriguez engaged

However, he said that he believes the company would have to eventually offer some discounts. Tesla said it raised $521million from Chinese banks as a term loan for raising the local factory. His research firm Citron Research called for the electric-car maker's share price to rebound to $320, a 13% premium on its current value.

Some analysts TechNode spoke to believe the move has less to do with regulatory issues and more to do with Nio's cash flow constraints and its struggle to sell cars.

Tesla also amended a separate asset-backed credit agreement, increasing how much it can borrow by as much as US$700 million.

Settling the US$920 million convertible bond that matured March 1 taxed the company's balance sheet, which had about US$3.7 billion in cash and equivalents at year-end.

Nio made losses of $1.4 billion in 2018, despite revenues of $720 million. Nio predicts that the slowdown will continue into the second quarter.

Share