Tesla is considering raising $5 billion from Chinese investors to fund its recently announced plant near Shanghai, according to a report from Bloomberg.
The report cited a person familiar with the plans, but did not include comment from Tesla. While intentions to build the plant in Shanghai were announced last month, Tesla didn’t offer details on how much the factory would cost.
The China factory is important for Tesla in that it will help the company avoid a 25 percent additional tariff on U.S.-made cars. China is the world’s biggest market for electric cars and the second-largest market for Tesla.
Chief Executive Elon Musk has insisted that the company has no plans to raise additional capital, but many analysts believe Tesla is running short on cash as it attempts to get Model 3 manufacturing up to speed.
“Chinese funding partners could enable Tesla — which is yet to turn a profit — to share the financial burden of realizing an ambitious expansion plan that includes building a factory in Europe,” Bloomberg reported.