Tesla gets $520 mn funding for first Chinese plant

Daniel Fowler
March 11, 2019

Tesla has broken ground on its Dollars 2 billion Gigafactory in Shanghai. Although the exact number can not be released, Tesla said that its sales in China in the first two months of this year have more than doubled from the same period last year.

"Another reason for terminating the Shanghai factory plan is that the Chinese government this year introduced some new policies to encourage vehicle manufacturers and research and development institutions to further develop vehicles through cooperation", Xie said.

A Shanghai city government official said on Wednesday that they expect Tesla's vehicle assembly facility to be completed in May this year, which is a lofty goal since the site location was not officially announced until Oct 2018. It aims to have the factory fully operational by the end of the year.

A group of institutional investors in Tesla has sued CEO Elon Musk, alleging that his repeated "misstatements on Twitter" continue to harm the company and its shareholders. The plant is Tesla's first assembly factory located outside of the U.S.

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Vehicle sales in China have hit a slump, falling for the ninth straight month in February after recording the first annual drop in more than two decades past year. The plant operated as a joint venture between GM and Toyota before closing in 2010.

Beginning local production in China is key for Tesla to reduce the costs of its cars in what is the world's largest market for electric vehicles. Tesla borrowed 431.0 million USA dollars under the agreement in 2018.

In July 2018, China raised tariffs on USA autos another 25 percent, (from 15 percent to 40 percent) amid ongoing trade tensions in response to the Trump administration's tariffs on $200 billion worth of Chinese goods.

Higher-end versions of the S and X, equipped with a 100 kWh battery, will still be made and sold by Tesla, but at a higher price, CNBC, adding that Tesla did not respond to inquires as to why the S and X offerings were pared back.

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