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Chinese money to build Tesla's new Gigafactory

Tesla produces its electric cars so far exclusively in the USA. The first foreign plant for two models and vehicle batteries is to be built near the Chinese metropolis of Shanghai. Financing stands - Chinese banks granted mega-credits for this project.

Tesla has secured funding for its new plant in Shanghai. Several Chinese banks have agreed to provide the electric car maker with up to 3.5 billion yuan, Tesla said. That's the equivalent of 465 million euros. The lenders include the China Construction Bank, the Agricultural Bank of China, the Industrial and Commercial Bank of China and the Shanghai Pudong Development Bank. What Trump obviously cannot produce, the Chinese show – job creation, while in the US, the trade deficit is at a 10-year high.

Tesla laid the foundation for his first foreign plant in January. The electric car maker wants to start in the "Gigafactory 3" at the end of the year with the Model 3 production for the Chinese market. The construction progress (see picture), however, puts the timetable into question. The factory will also produce batteries for the vehicles. In the long term, Tesla wants to manufacture his new SUV model Y there as well. The goal is an annual production of 500,000 vehicles.

So far Tesla manufactures its vehicles exclusively in the USA. The first plant is located at the company headquarters in Fremont, California. The second is the "Gigafactory 2" in the US state of Nevada. With the new plant in Shanghai, the car maker wants to avoid Chinese import duties. In addition, it reduces transport costs, wages in China are lower, and China is benefiting from subsidies for electric cars when building cars in China.

Tesla shares improved by 2.3 percent following the announcement of post-trading news. On Thursday, Tesla papers had already gained 0.1 percent.