Tesla’s arm in China, Tesla (Shanghai) Co. Ltd has increased its registered capital to a total of 4.67 billion RMB (about $680 million) on Sept. 7, according to the information shown by Shanghai Industry and Commerce Administration authority.
The capital, according to the filings, will be used to expand Tesla Shanghai’s s business to include increased production of vital parts of electric vehicles, including battery management systems (BMS), motor designs, electronic control systems, etc.
The increased capital now accounts for about one-third of Tesla’s investment target for its factory in China. Bloomberg has previously quoted an insider that Tesla would rely on the support of the Shanghai Municipal Government to obtain loans from some large Chinese banks to fund the construction of the Tesla Shanghai plant.
Tesla first announced its plan to open a new production plant in Shanghai this May and has obtained its license on May 10.
The automaker has signed an agreement with the Shanghai government this July to build its Gigafactory 3 in Lingang Area. The factory is the first Tesla factory outside the U.S. and is slated to produce 500,000 vehicles a year. Tesla said that it will take two to three years before productivity can reach the expected target.
Despite the raise in capital, Tesla has yet to turn a profit. The company’s net loss in Q2 amounted to $740 million, doubling that of last year, according to the company’s Q2 2018 financial results. The loss per share was $4.22, higher than analysts’ expectation of $2.88. Elon Musk, chief executive of Tesla, has vowed that the company will achieve profitability in the second half of this year.
Tesla shares were down 6 percent in U.S. trading as of Sept. 7, with an intraday decline of more than 10 percent. Dave Morton, the chief accounting officer who joined Tesla for less than a month, announced his departure on Sept. 4.