On October 6th, American time, Tesla CEO Elon Musk confirmed on Twitter that the company has repaid the $1.4 billion loan provided by the Chinese government for the construction of its Shanghai super factory.
It is known that the loan started in December 2019, with a repayment period of 5 years or 60 months, but Tesla formally repaid all the loans within just 16 months. As of Tesla’s Q2 2021 financial report, all debts have been fully repaid, and Elon also responded to an article from CleanTechnica on Twitter, stating that “Tesla has a debt that must be repaid.”
According to Reuters, this loan was provided by several banks including the Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, and Shanghai Pudong Development Bank. The loan amount repaid by Tesla this time is from the profits of the Shanghai super factory. However, early repayment of loans has always been a “good tradition” at Tesla. As early as May 2013, Tesla repaid a huge loan from the U.S. Department of Energy nine years early.
Tesla’s rapid repayment of the $1.4 billion loan from the Chinese banks may be related to the increase in gross margin rates obtained by Tesla in car sales. At yesterday’s shareholder meeting, it was also mentioned that the Shanghai super factory has the highest production quality and lowest cost. According to TESLARATI, the current Model 3 made in China has a gross margin rate of 39% and Model Y has a gross margin rate of 29.4%, and vertical integration and improved manufacturing efficiency can further control costs and increase gross margin rates.
Today, Tesla’s sales have always ranked first in the sales chart. The ability to repay loans in advance also shows that Tesla is using funds reasonably and improving profitability while repaying loans through financial strategy. From Q3 2019 to the present, Tesla has achieved eight consecutive quarters of profits. Combined with the goals and plans stated at yesterday’s Tesla shareholder meeting, we may really believe what Elon said, that Tesla will occupy 2/3 of the global electric vehicle market share by 2030.
🔗 Source: TESLARATI
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.