Tesla Is Raising $2 Billion To Help Speed Up Model 3 Production

Industry News

Anyone interested in some fresh stock?

The Tesla Model 3 debuted to great fanfare with a crap ton of $1,000 pre-orders being placed for the company’s entry-level EV. How much exactly is a “crap ton”? Try around 373,000 total deposits. A total of 8,000 customers have already cancelled their deposits and Tesla has cancelled another 4,200 which were duplicates. We know these figures because Tesla has decided to issue stock to help fund Model 3 production. According to its filing with the SEC, the automaker will attempt to raise $2 billion by issuing new shares.

Elon Musk is going to buy 5.5 million shares, selling off half that amount to cover taxes (on the other half). He is also planning to donate 1.2 million shares to taxes, again in the name of offsetting his tax obligations. In total Musk alone will raise around $600 million which leaves investors $1.4 billion worth of shares to snatch up. This may sound bad on paper, a company issuing new stock so that it can build a product. But this is Tesla’s M.O. The company did the same thing last year. The Model X launched and the company was none the worse for wear. We don’t doubt Tesla will be able to sell all its new stock. What we’re really curious about is if all that extra cash will result in Model 3s flying off the line.

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Tesla has lofty production goals, 500,000 cars off the line by 2018, but the last time we checked (December of 2015) the automaker was only kicking out 2,000 cars a week and that was only with the Model S and X being ordered. That was six months ago, though, but now the production line is facing added pressure from the in-demand Model 3. Hopefully an extra $2 billion helps ease the strain.

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