A capital raise by Tesla has been anticipated since late previous year, gaining steam last month after Chief Executive Elon Musk said the company could be "close to the edge" on cash needs.
Elon Musk recently attended the 2017 World Government Summit in Dubai, to launch Tesla in the UAE.
Electrek has learned that Tesla is planning to discontinue the least expensive versions of the Model S next month.
"It is also part of the Dubai Smart Autonomous Mobility Strategy aimed at transforming 25 per cent of total journeys in Dubai into autonomous journeys by 2030".
Tesla management has guided cash burn for 2017 to around $2.3 billion which means that the company will have about two years worth of cash going forward. The company announced Friday it had raised $1.2 billion in capital to help deliver the Model 3. By comparison, Tesla sold just 76,230 vehicles in 2016. The company initially planned to offer 968,993 common shares and increased that to 1,335,878 shares of stock, raising an additional $350M. The company notes that while they began offering the 60kWh model a year ago to make owning an electric vehicle more affordable, most buyers have ended up going for the Model S 75kWh.
With the Model 3 on the way, Tesla will have to figure out how to accommodate a significantly larger strain on its current resources, insofar as delivery is concerned. The speculations were fueled by a statement by Musk previous year in which he said that the company was "close to the edge" on its requirement for cash.
As per the company's public statements, Tesla is offering $250 million of common stock, as well as $750 million in aggregate principal amount of convertible senior notes due 2022. Curiously, Musk has increased his own personal borrowing capacity by $100 million to $624 million total and Musk's largest lender, Morgan Stanley, is also Tesla's eight largest shareholder.
Gadfly's Liam Denning has a different take on Tesla's raise. That capital came through about $350 million in common shares and another $850 million through the sale of convertible debt.