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Tesla To Raise Over $1.15 Billion To Help Offset Risk For Model 3 Production (techcrunch.com)
Tesla is looking to raise a total of around $1.15 billion from stock and convertible senior notes as a way to help "further reduce any risks" that it'll incur as it scales its business to handle its aggressive Model 3 production schedule, the company said. From a report: Tesla's decision to pad out its balance sheet with more capital was anticipated by many analysts, and a fair number of Wall Street watchers actually thought Tesla would seek more to help it grow based on recent comments made by Tesla CEO Elon Musk. The Model 3 is set to begin full production this year, with pre-production begun in February with a temporary production line pause to help get processes at its Fremont factory ready for the new vehicle. The split of the new funding efforts will see Tesla pursue $250 million in common stock offering, with $750 million raised via convertible notes due in 2022. Elon Musk himself will personally contribute by buying $25 million in Tesla stock.
They couldn't do the model 3 because batteries were still too expensive. It was only possible now.... which is why they did it now.
When the batteries cost $45,000 you can't make a $35,000 car.
I don't think you understand what raising capital means.
Tesla is selling stock, and the market is buying it. Capital rounds are almost unavoidable in large, rapidly growing businesses. Investors convert their ownership from a larger share in a smaller company to a (slightly) smaller share in a company that they feel will become much larger because of it. The money gained from doing so funds the scaleup.
It has nothing in any way, shape or form to do with "subsidy". Capital rounds are capitalism in its purest form.
Stale pastry is hollow succor to one who is bereft of ostrich.
Good thing you posted as AC, don't want your name associated with not knowing a thing about stocks.
(Citation Needed)
The Roadster was promised at $100k. This was based on Eberhard's budgeting, not Musk's. During the development, the board (including Musk) eventually came to realize the degree to which Eberhard had fudged the numbers and all of the problems he had gotten the company into (penalties for unmeetable contracts, a stupid choice of gearbox supplier, etc), and ultimately he was fired. Their estimate at the time was that the car would end up at over $120k. However, with a lot of good decisions, such as getting customer buy-in to (rather than starting over on the gearbox) switch it from a two-gear to a one-gear with a more powerful drivetrain to achieve the same accel, they brought the price down to $109k at release.
The Model S was initially promised at $57,4k for 40kWh, $67,4k for 60kWh, and $84,4k for 85kWh. The price today? $59,9k for 40kWh, $68k for for 60kWh, and $79,9k for 85kWh.
The Model X was the same story - came in right at around the price estimate.
Where you got this "Tesla has missed their projected price by about $30K consistently" is beyond me.
Wow, I'm sure Tesla totally didn't think about ensuring reliable supplies for their raw materials. I bet that totally never crossed their mind. Thank God we have Anonymous Coward here to point out their mistakes to them!
Stale pastry is hollow succor to one who is bereft of ostrich.
Right. Institutional investors are clueless about money. Slashdot ACs who know nothing about Tesla's internal figures and can't even bother to keep up on the published figures are the real financial geniuses. I'm sure you made that post from a yacht moored right offshore of your private island, didn't you?
You sound so much like the endless stream of people on Slashdot making fun of anyone who invested in Amazon because "they never turned a profit" - completely ignoring that businesses undergoing rapid scaleup by design don't return profits, and quite the opposite need regular capital rounds to pay for said scaleup.
Meanwhile, actual investors want companies with scaleup potential to do said capital rounds so that they can own a smaller piece of a much larger company. They don't want to be owning X% a Ma and Pa Roadster factory that churns out 100 cars a year, they want to be owning X/10% of the next GM.
Stale pastry is hollow succor to one who is bereft of ostrich.
Markets factor in things that might affect the stock before official announcements, based on what they expect the announcement to indicate. The stock is up because the capital round is smaller than the market had thought would be necessary.
Stale pastry is hollow succor to one who is bereft of ostrich.
The Roadster was promised at $100k
No, base price was supposed to be $89,000
From Musk's blog post of Aug 2nd, 2006; the Secret Tesla Motors Master Plan - https://www.tesla.com/en_CA/bl...
"Without giving away too much, I can say that the second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable"
Pain is merely failure leaving the body
A Theranos comparison? Really?
Tesla is producing real products (unlike Theranos) and is delivering slightly more cars per year than that little Stuttgart automaker Porsche.
However, unlike Porsche, Tesla is investing in one of the largest and most cost-effective battery factories in the world. It is possible that when Gigafactory is running at full-scale, most of the electric auto manufacturers and power companies will be buying batteries and energy storage systems from Tesla.
Tesla isn't anything like Theranos. I predict MBA's will be reading about Elon Musk - but not in the context you describe.
US prices.
Stale pastry is hollow succor to one who is bereft of ostrich.
They made promises for specific battery pack levels and they delivered on all of them. People stopped buying one pack size, so they stopped selling it. That has no bearing on Tesla's track record of meeting their promises, because the promises in each case were relative to specific battery pack levels.
And the fact that you keep saying "$73k" just makes you look like an idiot, because you keep citing the upgraded 60D (aka, the performance version of the 60 kWh-pack model S) instead of the base 60, which is $68k.
Stale pastry is hollow succor to one who is bereft of ostrich.