Tesla is working hard to launch its affordable Model 3 this year, but to do that, it seems the company needs additional funds. Thus, the EV firm is expected to raise about $1.15 billion in order to ramp up its launch plans.
Additional capital to ramp up Model 3 production
Tesla will offer $250 million of common stock and $750 million in convertible senior notes due 2022 in underwritten public offerings worth $1 billion. Further, the company is offering a 30-day option to the underwriters so that they can purchase an additional 15% of the offering amount on top of it. This way, the total funds raised will be somewhere around $1.15 billion.
Tesla is looking to shell out somewhere in the range of $2 billion and $2.5 billion on capital expenses over the first half of the year. To do this, the company needs fresh capital to support Model 3 mass production, which will kickstart in July.
There are reports of Tesla missing its production timeline again, as it is apparently not able to finalize the design of the Model 3. However, the latest prototype video suggests differently.
Will Tesla miss the Model 3 deadline?
Over last weekend, a new prototype of the Model 3 surfaced (via Electrek). Although the video is new, the Model 3 prototype looks similar to the other prototype videos released earlier.
In its letter to shareholders last month, the Palo Alto-based company stated that production of the Model 3 prototypes has already started as a part of their “ongoing testing of the vehicle design and manufacturing processes. Initial crash test results have been positive, and all Model 3-related sourcing is on plan to support the start of production in July.”
The company further stated in the letter that the Model 3 program is on track, and production will eventually increase to 5,000 per week in the fourth quarter and 10,000 vehicles per week sometime in 2018. Reservations for the Model 3 are already at around 400,000 vehicles.
Meanwhile, there are reports about a new Model Y, which, like the Model 3, will fall in the affordable category. The Model Y is expected to be a bit more expensive than the Model 3, according to Autocar. It’s still not known what specs the Model Y will pack, but the popular falcon wing doors are expected to show up in the car.
On Wednesday, Tesla shares closed down 0.88% at $255.73. Year to date, the stock is up almost 20%, while in the last year, it is up over 23%. The stock has a 52-week high of $287.39 and a 52-week low of $178.19.