Date
30 March 2017
Elon Musk, chairman of SolarCity and chief executive of Tesla Motors, speaks at a presentation in New York. He has come under pressure to raise funds after a US$2.6 billion deal to acquire SolarCity. Photo: Reuters
Elon Musk, chairman of SolarCity and chief executive of Tesla Motors, speaks at a presentation in New York. He has come under pressure to raise funds after a US$2.6 billion deal to acquire SolarCity. Photo: Reuters

Tesla eyes stake sale amid cash crunch

Tesla Motors Inc. is planning to raise money to help fund development and production of its new Model 3 sedan and build out a massive battery factory amid a severe cash crunch.

Reuters is reporting that the electric carmaker is considering equity or debt sale.

Some of that money could also support Tesla’s planned acquisition of its money-losing sister company, SolarCity Corp., according to a regulatory filing 

Tesla chief executive Elon Musk has warned the combined companies might need “a small equity capital raise” in 2017.

Musk is the major shareholder in both firms.

Tesla’s cash situation has taken on additional urgency with the US$2.6 billion SolarCity deal announced on Aug. 1.

Musk also said on Wednesday that Tesla plans to release an update of its partly automated self-driving system “in a few weeks.”

US regulators are probing a May 7 death in Florida in which a driver using Tesla’s Autopilot system crashed into a truck.

Tesla has posted operating losses in 14 straight quarters and negative cash flow since early 2014.

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CG/RA

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