Tesla is looking to raise $1 billion in stock and debt

Model 3 prototype filmed driving down the road

The notes in this offering will be convertible into cash and/or shares of Tesla's common stock at Tesla's election.

Only yesterday, Tesla announced a $1 billion capital raise to help strengthen its balance sheet before the Model 3 launch.

Another Tesla rival is stepping up in the electric vehicle market - Lucid.

Efraim Levy, equity analyst at CFRA Research, said the offering "is on the lower end of our expectations".

Of course, such praise comes with a caveat: "I think that [Musk] is moving from being a startup to being a full-blown company, and he's beginning to understand some of the challenges that brings", Robertson added.

The Palo Alto, California-based company led by tech industrialist Elon Musk said in SEC filings on March 15 that it's selling almost 1 million shares, that may be worth at least $250 million, and offering at least $750 million of convertible notes due in 2022. Of this common stock offered, Elon Musk, Tesla's CEO and largest shareholder, is to purchase 10% or $25m. Of course, that would lead to more dilution.

Tesla gained massive momentum from a spike in share price that began at the end of previous year, and it is this that has so far fuelled the company's progress. His believers, along with investors who buy into the vision of Tesla Inc., could hardly be happier.

"According to our financial plan, no capital needs to be raised for the Model 3, but we get very close to the edge", stated Musk.

With that in mind, the folks over at Autocar came up with a render of the purported Tesla Model Y, envisioning a sleek SUV with Falcon Wing rear doors but otherwise similar design and options as the Model 3. Tesla's capital expenditures for the first half of the year will be $2 billion to $2.5 billion, Langan noted, and the company anticipated starting to churn out Model 3s in the second half. The Model 3, scheduled to start production in July, will start at about $35,000 before incentives and is smaller than the Model S.

If Tesla shares were to fall in value, Musk's lenders could force him to put up more collateral or sell the stock. The question is whether it will need still more.

Tesla said the aggregate gross proceeds of the offerings, including the options granted to the underwriters, is expected to be approximately $1.15 billion.

Tesla did not immediately return a request for comment.

Related News: