Tesla bids for $1.5bn to drive car sales
Tesla intends to raise about $1.5bn (€1.27bn) in a bond offering as it seeks to ramp up production of its newest electric car, the Model 3.
The debt offering comes as Tesla receives thousands of advance reservations for the Model 3, averaging about 1,800 per day since the car's launch in late July. Elon Musk-led Tesla is counting on the Model 3, its least pricey car, to become a profitable, mass market electric car maker.
At the launch event, Mr Musk said the company would face "at least six months of manufacturing hell" as it increases production of the Model 3, which has a $35,000 base price.
Tesla had over $3bn in cash on hand at the end of the June quarter, compared with $4bn at the end of the previous quarter and $3.25bn a year earlier.
Tesla's cash burn, expected to top $2bn this year, has prompted short-sellers like Greenlight Capital's David Einhorn to bet against the Palo Alto, California company.
Shares of Tesla, which have risen 67pc this year, were up 0.5pc at $358.50 in premarket trading.
Last week Volkswagen CEO Herbert Diess said VW was looking to Tesla for inspiration on how to improve its core business.
Asked who VW's main competitors are, he said: "In the old world it is Toyota, Hyundai, and the French carmakers. In the new world it is Tesla."
Tesla has shaken up the auto industry with its ambition to build a mass market for electric cars, posing a competitive threat to established carmakers. (Reuters)