Plasma engines have long been…
With OPEC heading to Vienna…
Tesla’s ambitious production plans for its new Model 3 electric vehicle, which will see the assembly timeline pulled ahead two years, may entail billions of dollars in fundraising through stock sales.
Tesla hit the ground running with its new Model 3 electric vehicle, with impressive advance sales that indicate this car will be very mainstream at a $35,000 price tag, but the design has not yet been finalized though mass production will begin next year.
According to Tesla, the Model 3, unveiled in March, will see its final design completed by 30 June. The company is hoping to start mass production of its Model 3 towards the end of 2017. The plan is to produce 500,000 vehicles a year in 2018, a timeline which was pulled back from the initial 2020.
Related: Iran Hits Saudis Where It Hurts, Offers Discounts On Asian Crude
But to do that, capital spending will increase by about 50 percent -- $750 million -- from the original budget for this year, which would probably require some fundraising, Tesla CEO Elon Musk said.
“With its ambitious plans that will require an incremental fundraising, we view Tesla as more of a cash-hungry startup unicorn than a traditional public company,” analyst Brian Johnson of Barclays told Bloomberg. “With Tesla likely to come to the market for a capital raise near-term, it’s worth asking whether it deserves an up round or a down round.”
Related: Appreciating Dollar Caps Crude Rally Again
He projected a $3 billion equity raise in the second quarter. At current stock prices, a transaction of that size would be about 14.5 million shares, an increase of 11 percent to the number of shares outstanding.
If completed, this would be Tesla’s sixth capital raise in the last four years, following a lull after its June 2010 initial public offering, when it raised $226 million in the first IPO for a U.S. automaker in a half century.
By James Burgess of Oilprice.com
More Top Reads From Oilprice.com:
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…