Tesla (TSLA) maxes out $5.8 billion Chinese bank debt facility as China sales crash

Tesla has fully drawn down its China Working Capital Facility to $5.8 billion, according to its Q1 2026 10-Q filing — a 35% increase in a single quarter. The facility, which didn’t exist two years ago, now represents 64% of all Tesla’s non-recourse debt.

The company tapped every available dollar from the Chinese credit line while sitting on $44.7 billion in cash and short-term investments in the US — and while its retail sales in China crashed 16% year-over-year.

From zero to $5.8 billion in under two years

The China Working Capital Facility has grown at a remarkable pace since Tesla’s Chinese subsidiary first created it in April 2024 as an unsecured revolving facility of RMB 20 billion (~$2.8 billion) with a syndicate of Chinese bank lenders.

In March 2025, Tesla amended the facility to extend the availability of funds through April 2028. Six months later, in September 2025, Tesla doubled the commitment by adding another RMB 20 billion — bringing the total to RMB 40 billion (~$5.5 billion). The borrowed funds carry an interest rate equal to the People’s Bank of China’s Loan Prime Rate minus 0.89-0.99%, which works out to roughly 2.01-2.11%. That’s a preferential rate — significantly below what most companies borrowing in China would pay.