Tesla (NASDAQ:TSLA) Needs $1.15-B, Cannot Produce EVs Without It
Tesla (NASDAQ:TSLA) plans to raise 1.15-B in new funding to help fuel production of a mass market-targeted Model 3 electric car set for release this year.
The company said that it planned to offer $250-M in common stock and $750-M in convertible notes, with underwriters being given the option to buy an additional 15% of each offering.
Tesla’s CEO Elon Musk will take part by buying $25-M worth of the new shares, according to the company.
The offerings were expected to raise about $1.15-B for Tesla, which said it intended to use the money “to strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes.”
Tesla’s Model 3 was on track to begin production in July, with output gradually ramping up to 5,000 vehicles weekly by the end of this year, according to executives.
The Model 3 is priced at a moderate $35,000 in the United States, below the price of its initial models S and X electric vehicles.
Tesla dove into the Red in Q-4 of last year with “orders” for some electric car models hitting record highs, according to an earnings statement in February.
Mr. Musk expressed confidence in an earnings call at the time that Tesla electric car production would climb to 500,000 next year.
According to its latest financial report, revenue for the Quarter that ended 31 December came to $2.28-B, up from the $1.22-B taken a year ago.
The company recorded a loss of $121.3-M, compared with a profit of $22-M in the prior Quarter but a loss of $320.4-M in the same frame a year earlier.
General Motors (NYSE:GM) the leading US automaker, will challenge Tesla’s lower-priced model with its own Chevy Bolt electric vehicle.
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