Tesla is on the verge of bringing their first mass-market vehicle, the Model 3, to the public. But before plans can go ahead as scheduled, the automaker announced plans to raise another $1.15 billion.
To accomplish this task, Tesla’s CEO, Elon Musk, will be selling stocks and notes valued at a little over $1 billion. Even with their growing fan base and ability to make impressive cars, Tesla has lost money three years straight. The company hopes that production of the Model 3 will turn around their money troubles. At a cost of $35,000, this new model will certainly increase demand. Tesla has high ambitions for production as well, toting a manufacturing goal of 5,000 cars a week at the end of the 2017 and 10,000 for the end of 2018.
Tesla plans on offering $250 million of common along with $750 million of convertible senior notes that are due in 2022. The underwriters of the offerings will have the ability to purchase an additional 15% of each of the aforementioned stock for 30 days. Elon Musk also plans on $25 million of the common stock to help reach the intended goal of $1.15 billion. In a statement the company said “Tesla intends to use the net proceeds from the offerings 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.” (http://bit.ly/2nDzu3F)
The automaker recently revealed that they will be skipping the beta version of the model 3 and will instead go directly to the early release candidate. This information was shared during an investor conference call and according to Musk, the beta version is being skipped thanks to the company’s use of “advanced analytical techniques.” This means that the company sees no point in expending the time and resources if there is no need to do so.
Hopefully all goes well with the launch of the Model 3. With production of Tesla’s vehicles taking place in Freemont, California, the American manufacturing industry will see a nice boost if everything goes according to plan. Musk also intends to transfer the battery in the car to the 2170 lithium ion units currently being produced at Tesla’s Gigafactory in Sparks, Nevada. Investors also sent the company’s stock up 3% once they released their plan to raise the $1.15 billion, so as for now things are looking up for the automaker.
Make sure to keep checking back with Manufacturing Talk Radio for more on this developing story and all the latest news in the manufacturing industry.