Tesla is seeking $2 billion from Chinese lenders for its Gigafactory 3 in Shanghai, according to research from JL Warren Capital.
Backers lined up for the financing include Shanghai Pudong Development Bank, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China.
About $500 million of Tesla’s new capital will go towards the first stage of the Shanghai Gigafactory build, with the total project loan amounting to about $2 billion, the note said.
CNBC reported that the JL Warren note said the first stage of financing will likely have a 3.9 percent interest rate, less than the 4.35 percent from People’s Bank of China. It’s a financing model that will likely help Tesla produce its initial 250,000 lower-end Model 3 vehicles in China.
JL Warren is a New York-based investment research firm that focuses on Chinese companies, as well as U.S. firms with significant exposure in China.
Tesla has started work at the factory site in China and is on pace to begin manufacturing cars by the end of 2019.