Tesla is to boost its cash reserves with another $1.5bn as it tries to stave off the liquidity pressures caused by its headlong rush to become a mass-market car producer.
The latest capital raising, a bond sale announced on Monday, marks the first time the company has turned to the markets for an issue of straight debt. It is set to lift the amount it has raised since the start of 2014 to $7.9bn, with Wall Street expecting further hefty cash calls to come.
“We’ve been in a bull market for a number of years. They’ve been good at tapping the market for growth,” said Ben Kallo, an auto analyst at Baird. “It’s going to require significant amounts of capital for a number of years,” he added, with Tesla burning through $2bn-$3bn a year as it builds the battery and assembly plants needed to reach its ambitious targets.