Tesla Motors to raise funds to develop Model 3 sedan, battery factory
01 Sep 2016
A cash crunch has forced Tesla Motors Inc to seek to raise additional money this year to help fund development and production of its new Model 3 sedan and set up a huge battery factory, the company said yesterday.
The company said in a filing with the US Securities and Exchange Commission that it would raise money through equity or debt offering.
Some of that money could also go towards acquisition of its money-losing sister company, SolarCity Corp.
Tesla CEO Elon Musk had warned of a need for a "a small equity capital raise" by the two companies in 2017, in which Musk is the major shareholder.
The $2.6-billion SolarCity deal announced on 1 August had added an element of urgency to the cash position.
Musk further said yesterday that Tesla planned to release an update of its partly automated self-driving system "in a few weeks."
Meanwhile, US regulators are investigating an accident in which a driver using Tesla's Autopilot system crashed into a truck on 7 May, in which one person died (See: Florida death puts big question-mark on Tesla autopilot). Reuters reported Baclays analyst Brian John as saying that the timing of the SEC filing "reinforces the need for SolarCity to have quick access to capital.''
The document further disclosed that Musk and SolaryCity CEO, Lyndon Rive, discussed a potential Tesla-SolarCity merger in February.
Speaking with MSNBC's Chris Hayes, Musk said he was pessimistic about slowing or reversing the effects of carbon pollution on global climate change. He told Hayes, that doing so required an effective means of pricing carbon emissions agreed to and implemented by all nations. In his remarks, Musk referred to what economists called ''the tragedy of the commons.''
Musk cited fishing grounds by way of an analogy. ''Since no one owns a particular fishing area, it will get fished to extinction - because there's no price for that.'' No one owns the earth's atmosphere, he points out, leaving it open to a similar fate. ''There's no price for carbon, so we do all these things that cause long-term damage,'' he added.
