Tesla Is Sure to Increase the Capacity of Model 3 by Raising US$1.5 Billion

11 Aug

On August 7, 2017, EV manufacturer Tesla claimed that they will raise US$1.5 billion in a bond offering to increase the capacity of Model 3. According to Tesla’s financial report, the company’s expense of Q2 in 2017 reached up to US$1.16 billion.

Model 3 is an inexpensive EV released by Tesla, which only costs US$35 thousand. Due to this competitive price, Tesla received lots of orders after the announcement of Model 3. The biggest challenge for Tesla is to boost the production of Model 3. In order to deliver the orders of Model 3 on time, Tesla spent a large amount of money building new EV manufacturing factories and battery manufacturing factories. Its expense of Q2 in 2017 broke the record and reached US$1.16 billion.

At the delivery conference of Model 3 on July 28, 2017, Tesla’s CEO Elon Musk stated that Tesla faced a huge challenge in increasing the capacity of Model 3 in the past half year. By the end of July in 2017, the total order of Model 3 is above 500 thousand. Based on Tesla’s previous producing plan, the capacity of Model 3 in 2018 is expected to be 500 thousand and 1 million in 2020. However, in 2016, Tesla’s annual capacity is 84 thousand.

As the most noteworthy EV manufacturer in the world, Tesla has about US$3.0 billion in cash. Its upcoming plan of large-scale expansion is a big challenge for its capital. At the financial report conference of Q2 in 2017, Musk stated that Tesla will start raising funds soon. However, instead of investing equity, Tesla will release bond.

Tesla will spend US$1.5 billion to increase the capacity of Model 3. In December, 2017, the monthly capacity will turn to 20 thousand. For the customers who order the car now, they have to wait until the end of 2018 to get the new car.

(Article source: Tech News; Photo source: Tesla Club Belgium via Flickr CC2.0)