As Tesla gears up to launch its Autopilot 2.0 suite of driver assistance technologies, company CEO, Elon Musk, has taken to Twitter to announce major Autopilot improvements are due with forthcoming software upgrades.
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Perhaps more alarming is the fact that Tesla also said the regulatory filing that 15 separate institutional investors passed on the opportunity of either acquiring SolarCity or injecting equity into the company. SolarCity has struggled financially and some analysts have said that its cash burn could be a problem for Tesla, which also needs money to develop new cars like the Model 3 sedan, which is supposed to begin full production in mid-2017.
Both companies are now facing financial difficulties due to their high operating costs and Tesla recently disclosed a securities filing revealing that it will have to pay $422 million to its bondholders during the third quarter.
Tesla came under fire earlier this year following a fatal crash in the United States involving a Model S driver using the firm’s Autopilot system. However, CEO Elon Musk is not letting the series of setbacks his carmaker is facing get to him.
Additionally, the preliminary proxy for the all-stock acquisition indicated that Tesla had considered proposing the deal before its May stock offering of $1.4 billion and its June announcement that it planned to purchase SolarCity, Bloomberg reports. Rive called a special meeting of Tesla’s board on February 29, 2016, in which Tesla CFO Jason Wheeler presented the operational and product synergies from the merger.
Earlier this month, Tesla said it closed the second quarter with almost US$3.25 billion in cash, but in July it repaid US$678 million on a revolving credit line and planned to redeem US$422 million in convertible notes.
The company added that the funds will be “primarily used for tooling, production equipment and construction of the Tesla’s Model 3 production lines, equipment to support cell production at Tesla’s Gigafactory”.
The company wrote in SEC filing earlier this month: “During the third quarter, we will be using substantial amounts of cash in connection with conversions of our 2018 Notes and we could pursue other actions to reduce our outstanding balance of convertible notes, which could require further outlays of cash”.
As a result, Tesla would have around US$400 million in cash at a time when both Tesla and SolarCity have been burning through cash.
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Since late 2014, Tesla has burned through more than $3 billion in cash.
