Sci-tech

Tesla raises $1.2B ahead of production of Model 3 sedan

Tesla raises $1.2B ahead of production of Model 3 sedan

The company plans to begin production of its Model 3 sedan in July, and that auto is expected to start at around $35,000, before tax credits or incentives. Tesla now sells the Model S with seven powertrain options, with the most powerful Model S 100D's deliveries starting earlier this week. The company initially planned to offer 968,993 common shares and increased that to 1,335,878 shares of stock, raising an additional $350M. The company sold 1.3 million common shares at $262 a piece to raise $350 million, and raised another $850 million through convertible senior notes.

The transaction could be worth as much as $1.4 billion to Tesla if underwriters Goldman Sachs, Deutsche Bank, Citigroup, Morgan Stanley, Barclays, Merrill Lynch and Credit Suisse exercise all their options.

Here was the email Tesla sent to customers on Friday, explaining the changes.

Elon Musk and Tesla have raised $1.2 billion (all figures USD) in preparation of the launch the new Model 3.

"We intend to use the net proceeds from this convertible notes offering and our concurrent common stock offering to strengthen our balance sheet and further reduce any risks associated with the rapid scaling of our business due to the launch of Model 3, as well as for general corporate purposes", Tesla stated in the prospectus for the offering.


Underscoring the challenge Tesla faces with upwards of 400,000 reservations on the books, consider this: the company previous year sold 76,230 vehicles. This week, the company said it would do so. It leaves room for higher-end Model 3 variants to not compete with the entry-level Model S.

"No, it does mean something". So let's say they can start driving their cars by April.

Now that Tesla cars have officially made their way into Dubai last month, there is already a plan underway to add self-driving versions to the area's taxi fleet. "Tesla won't have enough time to find the problems and implement corrective actions before Start of Production".

The Tesla model S 60 and 60D option with its 60 kWh battery pack will be available until the middle of April, after which the base model S will be the 75 kWh battery pack. The cells will also be used in the upcoming mass market Model 3 sedan.


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