Loans to finance Tesla Shanghai plant

US electric carmaker Tesla Inc is planning to build its wholly-owned plant in Shanghai mainly with local debt, with construction expected to start within the next few quarters, the company said in its second-quarter earnings statement released on Thursday (Beijing time).

On the conference call following the release of the statement, CEO Elon Musk said: "For China I think our default plan will be to use essentially a loan from local banks in China." But he added that initial investment in the plant with an annual capacity of 500,000 cars will not start in any significant way until 2019.

The capital expenditure cost of the Shanghai plant, its first to be built outside of the United States, is estimated to be at around $2 billion, said Musk.