Tesla in mammoth fundraising bid to step-up new Model 3 production
- Author: Terrell Bush Aug 08, 2017,
Aug 08, 2017, 0:27
Moody's Inverstors Service assigned Tesla a B2 corporate family rating and slapped a B3 rating on the company's offering of senior unsecured notes.
With the Model 3, Tesla has brought together the technologies, design and manufacturing processes that have the potential to produce a profitable, high-volume electric vehicle that also has advanced autonomous driving capabilities.
The debt sale will test Musk's ability replicate the fervent following he's built among stock investors, who've bought into his vision of a clean-energy future and pushed the shares up 67% this year.
While the move marks the first non-convertible bonds the company has issued, Tesla has engaged in many cash-generating offers in the recent past. In normal circumstances, investors would be skeptical of a bond offering of that size. That lines up with the 5.4% investors are demanding for junk-rated companies, according to Bloomberg Barclays index data. If you think the Tesla's projections are unrealistic and far too ambitious, sell Tesla stock and look elsewhere.
"There is a risk they could still run out of money", he said.
An initial batch of the "Model 3" cars that rolled out of the Tesla plant in Fremont, California late Friday was given to customers, most of whom were employees of the company. The vehicle's battery was created to keep it going for "at least 215 miles" (345 kilometers) before needing to be recharged, according to Tesla.
According to a report from Reuters, several analysts had concerns the Model X would suffer due to the cheaper Model 3, which is going for $35,000. The Tesla Model S P100D by the Italia club travelled an impressive 1,078 kilometers on a single charge and became the first members to drive any production electric vehicle over 1,000 kms on a single charge.
Musk said on a quarterly earnings conference call last week that the company was considering raising debt, but not equity.
There's even a $44,000 version of the Model 3 that Tesla is using to compete with luxury sedans such as the Audi A4, BMW 3-Series or Mercedes C-Class.
But before you go out to try this in your own Model S, you should be aware of the hard conditions under which this trip was made. "Obviously, that's like the promised land right there".
Tesla (NASDAQ:TSLA) last released its quarterly earnings results on Wednesday, August 2nd.
"They are constantly spending on the next big innovation, whether the public knows what that is or not", James Albertine of Consumer Edge Research LLC.
Tesla had US$3b in cash on hand at the end of the second quarter, but said it expects to spend US$2b in the second half of this year. Tesla now makes fewer than 10,000 cars per month on average, but almost half a million buyers have placed a deposit for the company's cheapest ever auto.
As well as the range, the official EPA docs, reveal the long-range Model 3 will be capable of reaching 96km/h (60mph) in just 5.1 seconds - 0.5secs quicker the standard model.