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1/ Short thread on land grant contract between $TSLA & Shanghai Planning and Land Resource Administration Bureau, divulged in 10-Q. Find it here: sec.gov/Archives/edgar…
2/ The contract was signed in December 2018. Why are we seeing it only now?
3/ As @orthereaboot has noted, $TSLA is obligated to make $2.11B in capital expenditures at the Shanghai factory between now and 12/12/2023. Given Tesla's Cap Ex parsimony, $420MM per year in Cap Ex is a significant burden.
4/ More remarkable, $TSLA is obligated to pay total annual taxes of $335 million by 12/12/2023. (No indication of how that scales up.) Assuming max capacity annual production of 150k cars, that's $2,233 per car. Assuming a more realistic 75k, it's $4,466 per car.
5/ Article 20 also requires "the incomes of the construction project on the Granted Land for sales reaching target production will be no less than RMB SEVENTY-FIVE BILLION (RMB 75,000 million) per year"
6/ What does "the incomes of the construction project" mean? Does that mean that, considered along, the Shanghai factory must be profitable (albeit a tiny annual profit of $11 million)?
7/ Obviously, the land grant contract raises many, many questions. Too bad $TSLA divulged it so late, as it assures none of the questions will be asked for at least another three months.
