Tesla Sells More Stock To Raise Much Needed Cash Amid Production Delay

Tesla Sells More Stock To Raise Much Needed Cash Amid Production Delay
Blomst / Pixabay

Palo Alto, California-based Tesla Motors Inc (NASDAQ:TSLA) said in a regulatory filing today that it would increase its stock offering by 6.93 million shares at $28.25 per share, according to Bloomberg. The electric car maker badly needs cash, amid delays in production. The company has already drawn $465 million from the Department of Energy, under a program in which DoE financially supports the makers of alternative-fuel vehicles. On Monday, DoE asked Tesla to submit a repayment plan by October 31.

Tesla Sells More Stock To Raise Much Needed Cash Amid Production Delay

The stocks of Tesla Motors Inc (NASDAQ:TSLA) jumped 3.7 percent to $29.37, after increasing the stock offering. Goldman Sachs Group, Inc. (NYSE:GS) has taken the responsibility of the share sale. Elon Musk, the CEO of Tesla said that he would also purchase 35,398 shares of the company for approximately $1 million. Musk already owns 26 percent of the company. As of July 16, Tesla has 105.4 million outstanding shares.

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The company started selling its Model S hatchback in June. However, the company reduced its revenue target for 2012 to $440 million from the earlier estimate of $560 million. Tesla Motors Inc (NASDAQ:TSLA) said that it has fallen behind on supply, due to unspecified production problems. The Model S starts at $57,400. The company is relying on the demand of the Model S to return profits.

Unfortunately, the company is facing production problems, and has produced just 255 Model S cars tthrough September 23. The company said in an SEC filing, certain suppliers have experienced delays in supplying the components. Tesla Motors Inc (NASDAQ:TSLA) currently produces 77 cars per week, but it is planning to ramp up the production to 400 units per week, by the end of this year. The company anticipates selling 20,000 cars in 2013. Tesla Motors Inc (NASDAQ:TSLA) is also planning to launch the Model X SUV in 2014.

The company is also opening “Tesla Supercharger Network,” the company-run solar power charging stations, where Tesla drivers can charge their vehicles when driving across California. Initially, the six stations will come up in Lebec, Barstow, Coalinga, Gilroy, Folsom, and Hawthorne. Just 30 minutes of charging would last approximately 150 miles.

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