Tesla seeks $1.5 billion junk bond issue to fund Model 3 production

Tesla seeks $1.5 billion junk bond issue to fund Model 3 production

Tesla seeks $1.5 billion junk bond issue to fund Model 3 production

In addition, two pro-union employees recently spoke out about the potential dangers of the Model 3 production ramp.

This information is essential for the investors who are estimating the cost of the Tesla Model 3 in order to model ways that Tesla can achieve its targeted 25 per cent gross margin on the new vehicle.

Tesla's battery factory in the Nevada desert is producing more batteries than any other factory in the world, company boss Elon Musk has claimed.

Musk's tweets can be seen as him taking a stand against those questioning him as his company has been thrust into the spotlight. Tesla anticipates the addition of Model 3 production this year will eventually lift plant volume to almost 500,000 vehicles a year. At around $35,000, it's hard to make an argument for the Chevy Bolt or BMW i3 over the Model 3.

"The issuer will use the net proceeds from this offering to further strengthen its balance sheet during a period of rapid scaling with the launch of Model 3, and for general corporate purposes", Tesla said in the debt offering term sheet. That is $300 million more than Tesla initially planned to sell, a sign that demand for the debt is high.

That's according to Consumer Edge Research LLC senior analyst, Jamie Albertine, whose comments to The Street came after Tesla's recent investor call hosted by Goldman Sachs.

While almost 63,000 orders have already been canceled, Tesla has announced that it will receive about 1,800 new bookings per day, prompting the firm to accelerate its production pace.

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The figure is impressive, and confirms previous reports that Tesla plans to include a battery smaller than 60 kWh in the base model.

As a luxury auto, the Model S also has a few more perks than the Model 3.

Tesla is shopping $1.5 billion in notes that would reportedly pay just 5.25% interest, according to the Wall Street Journal, even though the company's credit is rated speculative grade, or junk.

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