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Tesla are raising around €955m from stock and convertible notes to mitigate the risk that they could face, whilst aggressively scaling Model 3 production.
Tesla confirmed their decision to bolster their balance sheet with new capital was predicted by analysts, many actually thought Tesla would seek even more capital based on comments made recently by Tesla CEO Elon Musk.
The Model 3 preparations began in February with a temporary production line to streamline the manufacturing processes need to be ready for the new vehicle. Tesla are expecting to begin full production later this year.
Elon Musk said in February that while Tesla could finish its production preparations for Model 3 without bringing in new funds, that would put the company “close to the edge” in terms of its overall cash position, and said it was then sensible for them to bring in new funds to help offset the risk that cutting it that close would entail for shareholders.
Tesla plan to raise €233.3 million in common stock, with €700 million raised via convertible notes due in 2022. Elon Musk, as always will put his own money where his mouth is and buy €23.3 million of Tesla stock.
Tesla last raised capital via a stock offering in mid 2016, selling €1.31 billion worth of shares.