Improvements to Tesla’s Autopilot system, including advanced processing of radar signals, were supposed to be detailed in a blog post on the company’s website by late Wednesday, Musk wrote that day. His 2006 master plan for the carmaker said it aimed to “expedite the world’s move from a mine-and-burn hydrocarbon economy towards a solar electric economy”.
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The blast sent shares of Tesla down to over 5% and SolarCity Corp (NASDAQ:SCTY) stock to just over 9% on Thursday. With an upcoming v8 software update, the vehicle will not have better hardware, as the company is not changing the radars embedded in the vehicles. This week’s filing indicated that over the last several weeks, 15 institutional investors, including a private-equity firm and a number of financial firms that were interested in teaming up with the firm, passed on both buying SolarCity and sinking some equity into it.
Convertible notes stand as yet another reason Tesla is looking for more cash. The Autopilot feature of these cars has drawn criticism due to crashes and accidents involving the cars and its drivers. And to top it off, Tesla still needs additional cash to settle some $422 million it owes to its bondholders, according to the SEC filing. In the most recent $124 million SolarCity bond issue, Musk and his cousins, CEO Lyndon Rive and Pete Rive, together purchased 80 percent of the bonds. 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. On May 31, the Tesla board changed course and chose to pursue the merger.
According to Bloomberg, the electric auto company reportedly had considered proposing the all-stock deal for SolarCity before the $1.4 billion stock offering which it launched in May.
As we reported on last week, Tesla’s capital spend will soar by 340% in the second half of this year while it stays the course with investments into new development and growth.
The next tranche of funds will “used primarily for tooling, production equipment and construction of the Tesla’s Model 3 production lines”.
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More concerning is that if SolarCity isn’t bought by Tesla Motors, it will have a harder time standing on its own.
