Tesla announced recently that it is selling $1.8 billion worth of high-yield bonds in an attempt to strengthen its balance sheet ahead of the planned production scale-up associated with the ambitious Model 3 launch. The electric car maker had initially planned to raise just $1.5 billion in the bond offering, but high demand for the notes due in 2025 led to an expansion of the original offering. The deal, expected to close later this week, marks the second cash injection for Tesla this year. The company raised $1.4 billion through a convertible debt offering as recently as March.

As our chart illustrates, Tesla plans to invest roughly $3.5 billion in capital expenditures, i.e. property and equipment purchases, this year, nearly tripling last year’s cap ex spending. Having spent $1.5 billion in the first six months of 2017, the company expects to spend $2 billion in the second half of the year to boost vehicle and battery production, expand its retail network and add supercharger locations.

Tesla burned through more than $1 billion in cash in the second quarter of 2017 and is expected to continue doing so for the rest of the year. The company held $3.0 billion in cash and cash equivalents at the end of June 2017.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved