Tesla New Car Model 3: Expected To Raise $1billion For Development
According to the Securities Exchange Commission (SEC) Tesla is expected to raise $1 billion by selling common stock and notes. The filing documentation indicated that the company will start offering $250 million in common stock and $750 million in debt.
Tesla CEO Elon Musk planning to purchase $25 million of common stock, or about 10 percent of the deal.
The convertible notes will change into cash or shares in 2022, with interest rates and other terms which has not yet determined.
Tesla mentioned in filing, this financial planning is crucial “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,”
The company said in its shareholder letter in February that it expects “to invest between $2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production”.
After the success of Tesla Model X the company is prudent to invest more on latest technologies and build more electric cars, model 3 development could set the new trends in the market.
After testing out prototypes earlier, Tesla said Model 3 vehicle development is under way in the Fremont, California manufacturing facility, as well as one of the company’s Gigafactories based in Reno, Nevada. Production is set to begin in July.
In a blog post on ZDnet In February, Tesla revealed plans to construct a total of five Gigafactories to cater to increased solar panel and electric vehicle battery demands.
Months earlier, Tesla completed its acquisition of SolarCity as part of its push to become a renewable-energy products company, taking on its $2.89 billion debt load.
The company reported $3.39 billion in cash and cash equivalents at the end of 2016, while total production of its vehicles rose 64 percent the same year compared to 2015.
Related: Hybrid Cars Market Expected To Reach $398 billion
image via: tesla
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