Tesla Raises Registered Capital of $680 Million For Gigafactory in China

When Tesla announced its Gigafactory 3 in China earlier this summer, there was a big question mark around the financing for the massive new factory. Musk has since confirmed that they plan to borrow money from local lenders and it looks like they already raised their registered capital from $16.6 million to around $680 million. That’s enough to start the work at the Tesla Gigafactory 3, which in total is expected to cost at least $2 billion. The facility will produce up to 500,000 cars and battery packs annually.

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They have not raised anything. Raising the "registered capital" is comparable to the number of shares that can be issued in the US company. It neither indicates that such shares/capital has been raised nor if it is even possible. A retraction is in order. 

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To borrow the money for building it there has to be enough equity in the company to give the lenders some kind of assurance. With a registered capital of $680 million, even if not funded yet, there is enough to use as leverage to get the banks opening the credit lines.   

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Normally the factory will be collateral for the loan. China want Tesla to invest so badly that IMO part of the deal to make a factory in China was to give Tesla a very attractive financing deal in addition to a good location for the factory. And  Chinese consumers will get Model Y at least a year before the rest of the world. Tesla can sell all of the output on the Chinese market for sure.  

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They are looking for $2B in capital from local banks to fund the factory. So they are 35% of the way there so far. And these 35% registered is going to be used for the loans. So the rest will be local loans / financing which is part of the 100% Tesla ownership deal. They have to use local financing as part of the deal to own 100% of the factory without a local partner.   

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