Tesla borrows more than half a billion dollars from Chinese state bank

China is loaning Tesla more than half a billion dollars to expand its Shanghai car manufacturing plant, the company disclosed in a regulatory filing. The plant’s expansion comes as Tesla fights to reopen its factory in California, which had been ordered closed as the U.S. tries to curb the spread of COVID-19. On Monday, Tesla told its American employees to return to work, defying local health officials.

The Industrial and Commercial Bank of China, China’s largest lender, is giving Tesla a credit line of up to 4 billion yuan ($565.51 million), which is to be used only for production-related expenditures at its Shanghai plant.

Last year, loan agreements with Chinese banks for up to 3.5 billion yuan ($493 million) supported the first phase of Tesla’s Shanghai factory. The plant closed for two weeks in January under health orders from China’s government, before restarting production with support from local officials.

Tesla’s Shanghai factory opened in October of last year; the plant is Tesla’s first outside the United States, and has been supported through Chinese loans as part of a government push to invest in electric vehicles and reduce air pollution. China’s new energy vehicle market is now the largest in the world.

What does this mean for Tesla?

Elon Musk’s company has been the recipient of Chinese government largesse ever since he announced plans to open a factory in Shanghai. This latest loan is a sign that the government is committed to the success of the American car company, despite the rapidly declining relationship between the two countries. In short: This is very good news for Tesla.

You can read a longer version of this story on The China Project.