Published: Mon, March 11, 2019
Markets | By Otis Pena

Tesla gets $520 mn funding for first Chinese plant

Tesla gets $520 mn funding for first Chinese plant

Tesla has broken ground on its United States dollars 2 billion Gigafactory in Shanghai.

Tesla shares rose more than two per cent in after-hours NY trading.

"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.

The decision not to allow Nio to follow through on previously announced plans to build its own auto factory in Shanghai effectively means Nio may have to wait in line until rival Tesla's plant in the city reaches capacity. The plant is Tesla's first assembly factory located outside of the U.S.

Tesla has been focusing a fair amount of Model 3 production on foreign markets, especially Europe and China.

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It is more evidence of deteriorating demand in the world's largest vehicle market, which a year ago contracted for the first time in two decades as the economy slowed and a trade war weighed on consumer spending.

Left has been historically critical of Tesla - he's even suing the company and its embattled CEO Elon Musk over a tweet in which Musk teased the idea of taking the company private.

Currently Tesla builds all of its vehicles at its Fremont, California factory, a former General Motors plant.

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. The Chinese government is aiming for NEVs to make up 20 percent of all vehicle sales by 2025, in an effort to curb pollution in the country.

The latest financing maneuvers between the Fremont, California-based Tesla and Chinese banks comes as the ongoing trade war between the U.S. and China continues. -China trade war, which has forced Tesla to adjust prices of its USA -made cars in China. This forced Tesla raise prices by around 20 percent in China for the Model S and Model X to remain profitable. Talks are still ongoing and the March 1 deadline to reach a deal has been extended by President Trump.

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