Tesla to raise funds in preparation of 'manufacturing hell'
Tesla Motors Inc
$176.45
05:40 28/03/24
Tesla announced on Monday that it is looking to raise approximately $1.5bn via a bond offering in the lead-up to the start of production of its newest vehicle, the Model 3.
Nasdaq 100
18,278.63
05:40 28/03/24
Elon Musk, chief executive at Tesla is hoping the Model 3, which will become the most affordable of the Tesla vehicles when it hits the road at $35,000 for the baseline model, will become profitable and mass-marketable.
At the launch, Musk had said the company could face months of "manufacturing hell" as it increased production of the vehicle, but just last week he told investors that there should be, "zero concern" about the company's ability to produce 10,000 Model 3's per week by the end of 2018 and that it had been looking into debt to expand the amount of cash on hand.
Monday's debt offering marked Tesla's maiden voyage into the junk-bond market.
Last year, Tesla reported having over $3bn of cash on hand, down from $4bn in the previous year and $3.25bn the year before, with its expected cash burn for this year alone pegged at $2bn .
Goldman Sachs, Morgan Stanley, Barclays, Bank of America-Merrill Lynch, Citigroup, Deutsche Bank and RBC were some of the institutionals participating in the fund-raising round.
As of 1550 BST shares were down 0.27% at $355.93.