Tesla Delivers First China-Made Model 3 to Employees | Financial Buzz

Tesla Delivers First China-Made Model 3 to Employees

Tesla, Inc. (NASDAQ: TSLA) announced on its official twitter for its China operations that it has delivered the first China-made Model 3 vehicles on Sunday to its employees. 

The vehicles were produced at Tesla’s Gigafactory 3 plant in Shanghai and the first 15 customers who are slated to get their Model 3s first are Tesla employees, said the tweet.

Tesla shares fell by 2.7% shortly after the opening bell on Monday morning.

Last week, Tesla and a group of Chinese banks agreed on a new RMB 10 Billion (USD 1.4 Billion), five-year loan facility for the Company’s Shanghai factory, according to Reuters, who cited three sources familiar with the matter. 

China Construction Bank (CCB), Agricultural Bank of China (AgBank), Industrial and Commercial Bank of China (ICBC) and Shanghai Pudong Development Bank (SPDB) are among the banks which have agreed to give Tesla the financial support, one source with direct knowledge said.

Earlier this year, the Chinese banks already offered Tesla a 12-month facility of up to RMB 3.5 Billion, which is expected to be repaid on March 4, 2020, according to Tesla’s filings with the Securities and Exchange Commission.

According to one of the sources, the new loan will partially be used to roll over the previous RMB 3.5 Billion debt. The second source noted that the rest of the loan will be used on the factory and Tesla’s China operations.

Tesla is aiming to produce roughly 1,000 Model 3 vehicles per week at its Shanghai factory, but eventually expects to ramp up to nearly 150,000 vehicles per year. 

The Shanghai factory is the first manufacturing site for Tesla outside of the U.S. The establishment of the factory positions Tesla to tap into other global markets, notably China. Additionally, the factory also allows Tesla to avoid higher import tariffs imposed on U.S. manufactured vehicles.

Tesla shares have now gained 29.32% this year.