Tesla Desperate for Cash in Push To Get Model 3 to Masses

In its first foray into selling pure debt, Tesla offered an eight-year non-call three-year bond that was originally marketed at a size of US$1.5bn. Being a famous person who makes movies and electric cars respectively is certainly hard for reasons beyond my ken, but the number of vaguely-worded statements issued about the end of a “normal relationship” lead me to believe otherwise.

In the near term, Musk has referred to Tesla’s challenges of ramping up production of its important Model 3 as “production hell“.

By comparison, Musk said, Tesla’s five-door liftback Model S – launched in 2012 – requires about 10,000 feet of wiring to operate. That could make shareholders and owners of the company’s convertible debt a fortune. S&P Global Ratings affirmed its B-minus rating on Tesla, saying the boost to liquidity should offset the company’s “significant execution risks”.

All in all, it is delays all around Tesla’s camp.

Mystery text:: The Gold Coast Bulletin claims they received a text message on August 4, one day before news of the split broke that suggested that the unnamed Queensland sporting identity had been spending “many nights” at Amber’s Gold Coast accommodation.

CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds “at least into mid-2018”.

But even as Friday’s deal seemed to be going well, many fixed-income accounts expressed some scepticism about a deal from a company that has been burning through cash.

Tesla may have promised that all its newly-made vehicles from October 2016 onward would have the groundwork for self-driving capabilities, but that doesn’t mean its technology is set in stone. It was 2015 when Musk started talking about plans to increase the aspect of single-charge mileage of all Tesla EVs to 621 miles (1,000 km), which he hoped to achieve not later than 2017, and then to 745 miles (1,200 km) by 2020.

Musk previously stated that the Model 3 will generate $20 billion revenue with $5 billion gross profit, which equates to a margin of around 25 percent on every Model 3 sold.

Tesla had $3 billion in cash on hand at the end of the second quarter, but said it expects to spend $2 billion in the second half of this year.