Tesla aims to raise $1.5bn for Model 3 ramp up

Bond offering plan as US electric car maker seeks to boost production of its newest saloon

(FILES) This file photo taken on July 19, 2017 shows Elon Musk, CEO of SpaceX and Tesla,  during the International Space Station Research and Development Conference at the Omni Shoreham Hotel in Washington, DC.
US entrepreneur Elon Musk said on July 20, 2017 he'd received tentative approval from the government to build a conceptual "hyperloop" system that would blast passenger pods down vacuum-sealed tubes from New York to Washington at near supersonic speeds."Just received verbal govt approval for The Boring Company to build an underground NY-Phil-Balt-DC Hyperloop. NY-DC in 29 mins," the flamboyant CEO of Tesla and SpaceX tweeted, using abbreviations for New York, Philadelphia, Baltimore and Washington DC.
 / AFP PHOTO / Brendan Smialowski
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Tesla said on Monday it intends to raise about US$1.5 billion in a bond offering as the US electric car maker seeks to ramp up production of its newest saloon, the Model 3.

The debt offering comes as Tesla receives thousands of advance reservations for the Model 3, which were averaging at about 1,800 per day since the car's launch in late July.

Elon Musk-led Tesla is counting on the Model 3, its least pricey car, to become a profitable, mass-market electric car maker.

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At the launch event, Mr Musk said the company would face "at least six months of manufacturing hell" as it increases production of the Model 3, which has a $35,000 base price.

Tesla had over $3 billion in cash on hand at the end of the June quarter, compared with $4 billion at the end of the previous quarter and $3.25 billion a year earlier.

Tesla's cash burn, expected to top $2 billion this year, has prompted short-sellers like Greenlight Capital's David Einhorn to bet against the Palo Alto, California company.

Shares of Tesla, which have risen 67 per cent this year, were up 0.5 per cent at $358.50 in pre-market trading.

* Reuters

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