Tesla announced on Wednesday in a regulatory filing with the U.S. Securities and Exchange commission that it plans on raising additional capital through either an equity or debt offering by year-end. The move would mark the second time this year the electric vehicle and battery company asked investors to chip in to back its aggressive growth ambitions.
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Tesla states that these funds would “be used primarily for tooling, production equipment and construction of the Tesla‘s Model 3 production lines, equipment to support cell production at Tesla’s Gigafactory, as well as new Tesla retail locations, service centers and Supercharger locations”.
The update from Musk came shortly after SpaceX, another company where Musk is chairman and CEO, faced a major setback when its Falcon 9 rocket exploded on the launch pad, destroying a payload valued at almost $200 million, along with the Falcon 9 booster.
American vehicle maker Tesla Motors, is planning to raise funds to counter a severe cash crunch. The company already raised $1.5 billion in May to provide funding needed for production of the company’s mass market EV: the Model Three. Unfortunately, the solar company, which Tesla is planning to acquire, also has a meek financial background.
At the same time, Tesla has always approached software and systems on its auto as having the capability to be improved over time, taking into account customer feedback.
Tesla has posted operating losses in 14 straight quarters and negative cash flow since early 2014.
For the future of the electric auto maker, the Q3 is quite important because the automaker is preparing to deploy the Model 3 – its affordable sedan – next year, and it wants to acquire SolarCity – the clean energy giant. Lazard, an investment bank, did some analysis to find out the value and advised SolarCity accordingly, but later it was found that there was an error in the analysis, due to which the value of the solar energy company was discounted by $400 million.
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Tesla said on Wednesday that one of its cars had crashed in Beijing while in “autopilot” mode, with the driver contending sales staff sold the function as “self-driving”, overplaying its actual capabilities.
