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Abu Dhabi, UAEWednesday 19 September 2018

Tesla aims to raise $1.5bn for Model 3 ramp up

Bond offering plan as US electric car maker seeks to boost production of its newest saloon

Elon Musk, the Tesla chief executive. The electric car maker plans to raise $1.5bn to boost production of its cheaper Model 3 car. Brendan Smialowski / AFP
Elon Musk, the Tesla chief executive. The electric car maker plans to raise $1.5bn to boost production of its cheaper Model 3 car. Brendan Smialowski / AFP

Tesla said on Monday it intends to raise about US$1.5 billion in a bond offering as the US electric car maker seeks to ramp up production of its newest saloon, the Model 3.

The debt offering comes as Tesla receives thousands of advance reservations for the Model 3, which were averaging at about 1,800 per day since the car's launch in late July.

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

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At the launch event, Mr Musk said the company would face "at least six months of manufacturing hell" as it increases production of the Model 3, which has a $35,000 base price.

Tesla had over $3 billion in cash on hand at the end of the June quarter, compared with $4 billion at the end of the previous quarter and $3.25 billion a year earlier.

Tesla's cash burn, expected to top $2 billion this year, has prompted short-sellers like Greenlight Capital's David Einhorn to bet against the Palo Alto, California company.

Shares of Tesla, which have risen 67 per cent this year, were up 0.5 per cent at $358.50 in pre-market trading.

* Reuters

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