Subsidies to Tesla: Shanghai government grants US $ 207 million
The Shanghai government provided $ 207 million in subsidies to Tesla in 2019 and 2020, in cash and in the form of assets and services.
On the one hand, in 2019, the Shanghai government agreed to provide $ 85 million of certain incentives in connection with the realization of certain Tesla investments in manufacturing equipment at Gigafactory Shanghai, of which $ 46 million were received in cash and the remainder 39 million were in the form of assets and services provided by the Government.
On the other hand, in 2020, the Shanghai government agreed to provide another $ 122 million in subsidies to Tesla.
Of the total incentives provided between the two years, 123 million were received in cash in 2020.
Subsidies to Tesla
Grant proceeds must be spent on qualified equity investments in Gigafactory Shanghai as stipulated in the agreement.
These incentives were taken as a reduction in property, plant and equipment, net, in the consolidated balance sheets and the cash receipts are reflected as investment cash inflows in the consolidated statements of cash flows.
Overall, Tesla’s ongoing construction activities consist primarily of the construction of Gigafactory Berlin and Gigafactory Texas, the expansion of Gigafactory Shanghai, and equipment and tools related to the manufacture of its products.
Currently the company is building Gigafactory Berlin with conditional permits.
Also on these transactions, the completed assets are transferred to their respective asset classes and depreciation begins when an asset is ready for its intended use.
In turn, interest on outstanding debt is capitalized during periods of construction of significant capital assets and amortized over the useful life of the related assets.
During the years ended December 31, 2020 and 2019, the company capitalized $ 48 million and $ 31 million, respectively, in interest.
Tesla designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and provides services related to its sustainable energy products.
You typically sell your products directly to customers, including through your website and retail locations.
Tesla also continues to expand its customer-facing infrastructure through a global network of vehicle service centers, mobile service technicians, auto body shops, Supercharger stations and Destination Chargers to accelerate the widespread adoption of its products.
