Categories AlphaGraphs, Earnings

Tesla (TSLA) gets another boost after securing $1.4-bln loan from Chinese banks

While preparing to commence full-fledged production at its Chinese factory, Tesla (NASDAQ: TSLA) is said to have secured a fresh loan of about $1.4 billion from a group of banks in the country. The financing comes at a time when the electric car maker is gearing up to roll out new models in China, including the latest Model Y. The stock gained about 1.5% during Monday’s pre-market trading.

In Expansion Mode

According to a report published by Reuters, a part of the five-year loan will be used for settling financing of about $500 million availed earlier this year from various banks, including China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China and Shanghai Pudong Development Bank.

Related: Telsa gains after Elon Musk reveals plan for Cybertruck

It is learned that the remaining amount will be used for expanding Tesla’s China operations, including completion of the factory. The report said that the creditors are offering the loan at the ‘best’ interest rate, which is slightly below the one-year benchmark rate set by the country’s central bank.

Tesla Q3 deliveries rises on Model 3 orders

Tesla’s CEO Elon Musk bets on the China facility to enhance profitability, as it would give the company access to the world’s largest automobile market while escaping the heavy tariffs imposed by the Chinese government on auto imports from the US. Currently, the focus is on increasing production and manufacturing more parts in China.

Q3 Surprise

Recently, the Silicon Valley firm surprised the market with stronger-then expected third-quarter earnings even as revenues dropped 8%. Then, the management reaffirmed its production goals for the Shanghai factory, despite the lingering uncertainties related to the Sino-US trade war.

Also Read:  HP (HPQ) stock jumps on Q1 earnings beat; lifts FY20 guidance

Bullish View

Last week, investor confidence got a boost after brokerage firm Credit Suisse issued a bullish statement on Tesla’s growth prospects, spurring a stock rally. The on-track China operation and progress achieved with regard to the European expansion added to the positive sentiment. The company is expected to provide updates on its production and delivery guidance at the Battery and Powertrain Investor Day to be held early next year.

Related: Tesla Q3 2019 Earnings Conference Call Transcript

Tesla’s stock gained about 1.5% during pre-market trading on Monday, after closing the previous session higher. The stock has remained on the upward trajectory since the last earnings report.

We’re on Apple News! Follow us to receive the latest stock market, earnings and financial news at your fingertips

Most Popular

A look at factors that make Snap-on (SNA) a compelling investment option

Snap-on Incorporated (NYSE: SNA), the century-old company that makes high-end tools for the automotive industry, is unlikely to have a smooth ride in the current quarter, given the deepening turmoil

BlackBerry (BB) Q4 2020 earnings call highlights; blames COVID-19 for not providing fiscal 2021 outlook

Immediately after BlackBerry's (NYSE: BB) fourth-quarter 2020 results came out last evening, its stock traded in the green for quite some time in the after-hours. However, when the company announced

Why HP (HPQ) is better off without Xerox (XRX)

Xerox Corp. (NYSE: XRX) has dropped its takeover bid for HP Inc. (NYSE: HPQ) citing difficulties created by the coronavirus outbreak. This could be a relief for HP since the

One thought on “Tesla (TSLA) gets another boost after securing $1.4-bln loan from Chinese banks

Comments are closed.

Top