Tesla is promoting $2 billion in inventory to make the Mannequin three

Tesla is selling $2 billion in stock to make the Model 3

When Tesla talked about its earnings in early Might, one huge query got here up: simply how will the corporate afford to make lots of of hundreds of Mannequin 3s (over 373,000, eventually rely)? By elevating a ton of funding cash, that is how. Tesla has introduced that it is promoting a complete of $2 billion in inventory, about $600 million of it from Elon Musk himself, to pay for its enlargement plans. It needed to transfer up its objective of 500,000 electrical automobiles per yr to 2018 in response to Mannequin three deposits, and meaning having a “good buffer of money” (as Musk stated through the earnings name) to maintain issues buzzing.

It wasn’t too onerous to see this coming. Tesla acknowledged that it underestimated Mannequin three demand by a large margin, and there was no approach that it might keep its present manufacturing plans (which had the battery-making Gigafactory in full swing by 2020) whereas maintaining lots of these clients completely happy. The large query is whether or not or not this inflow of money can be sufficient by itself. Musk prompt that there may be a necessity for debt, and additional fundraising is all of the extra doubtless if demand for the mainstream EV retains up.