Tesla Model 3: almost 63000 bookings cancelled, here's why

Herbert Rhodes
August 8, 2017

Following the event, Model 3 reservations have been on something of a surge, reportedly, so the company will no doubt need quite a lot of funding if it's to meet its current order obligations in a timely fashion. The rate at which TSLA is burning through cash is estimated to surpass $2 billion this year and has prompted short-sellers like Greenlight Capital's David Einhorn to bet on the fall of TSLA stock. Berenberg Bank raised Tesla from a "hold" rating to a "buy" rating and lifted their target price for the stock from $193.00 to $464.00 in a report on Tuesday, June 13th. The company receives about 1,800 net orders a day for its mass-market electric auto, Musk told investors on Wednesday, putting total net reservations at 455,000. Tesla also was the recipient of unusually large options trading on Thursday.

Electric carmaker Tesla has revealed plans to raise $1.5bn (£1.15bn) in its bid to fund incremental production of its new Model 3 auto.

Moody's has assigned the notes a credit rating of B3, which is considered non-investment grade (also known as speculative or junk bonds). Patience, though, has its rewards, as is the case with the Tesla Model X.

However, the company is facing a major challenge in the "considerable execution risks associated with the rapid ramp up in production of a totally new vehicle", he said. The non-recourse debt was absorbed from the SolarCity acquisition a year ago, and is largely secured by leased solar systems.

It's not surprising, but is certainly noteworthy that Tesla (TSLA) announce Monday it is selling $1.5 billion in senior unsecured notes.

Solar power and battery storage now make up a small percentage of Tesla revenue, but it has high hopes for both.

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Elon Musk-led Tesla is counting on the Model 3, its least pricey vehicle, to become a profitable, mass market electric auto maker.

Tesla CEO Elon Musk maintained his stance on the company's ability to deliver on its earlier promised model 3 production ramp up.

Tesla expects to manufacture 5,000 of the sedans every week by the end of 2017 and double that in 2018. Tesla's revenue was up 119.6% compared to the same quarter previous year.

While it's a lot of money, it could more than double the company's revenue to over $20 billion per year, according to their projections.

Musk told investors during Tesla's Wednesday earnings call that the company was considering a debt offering but would not sell equity in this round of financing.

Other reports by TheSundaySentinel

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