Tesla to raise $1.15bn ahead of Model 3 launch
Tesla has unveiled details of a much-anticipated $1.15 billion capital raising to help build a financial buffer ahead of the planned launch of its mass-market electric car – the Model 3.
The manufacturer has previously paused production at its California-based factory to start pilot production of the eagerly-awaited electric car, bringing it a step closer to starting full production in July.
The company said the offering includes $250m of stock and $750m of convertible debt.
Chief executive Elon Musk had previously highlighted the possibility of such an offering and plans to buy $25 million of the common stock himself.
The Model 3 is the car that’s promising to democratise electric vehicles but, unless you’re one of the lucky ones to have already placed an order, it looks as if you won’t be able to have one silently rolling into your driveway until mid 2018.
The all-electric 3 Series rival will boast a minimum range of 215 miles and a 0-62mph time of less than six seconds, regardless of derivative. Musk said these numbers were “minimum targets” which Tesla hoped to exceed when the finalised figures are revealed closer to market launch.
It is understood Tesla paused general production for a short period and began test building the Model 3 on 20 February 2017, with an aim to start production later this year and start the ramp towards 500,000 vehicles annually in 2018.
What can we expect to see from the Model 3?
The Model 3 is seen as the final stage in a ‘master plan’ to popularise electric vehicles. The three-stage plan began in 2006 when the Roadster was launched. From there, Tesla planned to build an “affordable” car (the Model S), before revealing an even more affordable car (the Model 3).
Tesla has also said that the Model 3 will be very practical for its size. Like the larger Model S, the Model 3 gets a luggage bay at both ends, and the lack of an internal combustion engine means that extra cabin space has been freed up. The windscreen and roof are also made from a single pane of glass designed to make the passenger cell feel light and airy.
Here’s the Tesla Model 3 reveal in full
The all-electric mid-size saloon was unveiled in California in April, and has been pre-ordered by around 400,000 people. It’s because of this high demand that Tesla has announced that any orders placed hereon in won’t be filled until mid-2018 or later.
The new model has been described as a “mass-market, affordable car”, and will cost from around $35,000. At the time of its unveil, that meant it’d cost around £24,300, but the recent drop in the value of the pound means UK customers currently stand to pay roughly £28,000.
However, for those in the UK that want to reserve one, the £1,000 deposit currently remains unchanged. Tesla has also confirmed that the extended delivery dates don’t reflect any problems or delays in initial production, which will still commence by the end of 2017.