Economy

Musk needs $1bn more for Tesla Model 3

Musk needs $1bn more for Tesla Model 3

Tesla CEO Elon Musk plans to purchase 96,900 shares of common stock, which is worth approximately $25 million at the public offering price. Although Tesla has enough money in the background to advance the production of the new model and can also gradually reduce his losses, Tesla boss Musk hangs the mood.

The Model 3 preparations began in February with a temporary production line to streamline the manufacturing processes need to be ready for the new vehicle.

Musk expressed confidence in an earnings call at the time that Tesla electric vehicle production would climb to 500,000 next year.

Tesla's stock fell.9% in trading today and after the offering was announced the stock is up over 2%.

The Model 3, priced at close to $35,000 before incentives, is the key in Musk's push to reach mainstream consumers. At the last count, Tesla had about 373,000 reservations for the vehicle.

China trade war will hurt American firms the most: Li Keqiang
But China will not overreach its regional influence to seek trade arrangements where the country's due role is not in place. The warning assumes significance because a meeting between Trump and Chinese president is in the offing.

Tesla disclosed Wednesday as part of its stock and debt offering that Musk increased his own borrowing by more than $100 million, to $624 million.

Tesla produced nearly 84 000 vehicles in 2016 and plans to make half a million in 2018, then a million in 2020.

That compares favorably with the base rear-wheel drive Tesla Model S 60, which has an EPA-rated range of 210 miles, and starts at $71,300 (excluding destination).

Goldman Sachs, Deutsche Bank Securities, Citigroup and Morgan Stanley, Tesla said will act as lead joint book-running managers for the offering.

While the trials and tribulations of Faraday Future have been sucking up much of the oxygen in the world of electric vehicle startups, fellow Tesla competitor Lucid Motors has been quietly going about developing its own Model S-fighting four-door EV, the Lucid Air. The company last tapped bond markets in 2014, when it sold $2bn of convertible notes to help fund its Gigafactory for battery production east of Reno, Nevada, according to data compiled by Bloomberg. Including options granted to the underwriters, Tesla expects to raise a total of $1.15 billion. In other words, it's hard to say for sure exactly what kind of deal you'll be able to get on an EV in 2019.


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