Tesla to take new $1.4 billion loan from Chinese banks for Shanghai factory: Sources

USelectric vehicle makerTeslaInc and a group of Chinabankshave agreed anew10billionyuan ($1.4billion), five-yearloanfacility for the automaker'sShanghaicar plant, three sources familiar with the matter said, part of which will be used to roll over an existingloan.

China Construction Bank (CCB), Agricultural Bank of China (AgBank), Industrial and Commercial Bank of China (ICBC) andShanghaiPudong Development Bank (SPDB) are among thebankswhich have agreed to giveTeslathe financial support, one source with direct knowledge said.

TheChinesebanksearlier this year already offeredTeslaa 12-month facility of up to 3.5billionyuan, which is due to be repaid on March 4, 2020, according to a filing the automaker made to the USSecurities and Exchange Commission.

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Thatnewloanwill be partially used to roll over the previous 3.5billionyuan debt, according to the first source. The second source said the rest will be used on thefactoryandTesla's China operations.

Thenewloan's interest rate will be pegged at 90 per centof China's one-year benchmark interest rate, the same as the 3.5billionyuanloan, the first source said. This is a rate that Chinabanksoffer to their best clients.

Tesla, CCB, AgBank, ICBC and SPDB did not immediately respond to Reuters' requests for comment.

Teslabroke ground on thefactoryin January and has started producing vehiclesfromitsShanghaiplant. It aims to build at least 1,000 Model 3 cars a week by the end of this year.

Thefactory, which isTesla's first car manufacturing site outside the United States, is the centrepiece of its ambitions to boost sales in the world's biggest auto market and avoid higher import tariffs imposed on US-made cars.

TheShanghaigovernment has also thrown its support behind theTeslaproject, which would be China's first wholly foreign-owned car plant and a reflection of the government's broader shift to open up its car market.