Tesla looks to raise $1.4 billion in capital in order to bring the Model 3 to market. Tesla’s CEO Elon Musk previously suggested this will be completed by June – 13 months ahead of the company’s planned production startup. Tesla said that they want the Model 3 to arrive next year.
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Still, however, the reservations as they stand now represent future revenue worth more than $14 billion for Tesla, which is a well justified reason to aggressively pursue capital raising campaigns to boost production and meet the high flying demand. We know that the vetting process is stricter and that there has been an increase in the vertical integration in the production process.
According to him, Musk’s plan to make parts in-house could minimize risk but it can be distracting and more costly.
By 2018, Tesla hopes to have produced 500,000 cars – that includes the Model S, Model X and Model 3 – as evidenced in recent images of Tesla’s Gigafactory. The company is hoping to be able to produce about one million vehicles by 2020.
And then there is the fact that the Model 3 design and specifications haven’t been finalized yet. Those plants were operated by automakers with decades of experience.
Aluminum, lithium and other materials – already in short supply – “could be another limiting factor”, said Sam Fiorani of AutoForecast Solutions. Last week, Tesla said it had hired Peter Hochholdinger, formerly of Volkswagen AG’s (VOWG_p.DE) Audi brand, as vice president of vehicle production.
Tesla has revealed in Securities and Exchange Commission filing that it intends to sell $2 billion worth of stock in order to speed up the production of the new Tesla Model 3.
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“I’d be really surprised if he can launch production by next July”, said Frank Faga, a Detroit-based auto manufacturing consultant.
