Tesla to sell $2bn in stock to fund Model 3 production
On Wednesday, Tesla announced plans to sell around $2bn in stock to pay for the production of the forthcoming Model 3, which was revealed in March and has already received almost 400k pre-orders. Tesla CEO, Elon Musk, has previously stated plan for the firm to produce 500k units per year from its Californian factory by 2018, therefore, the raising of funds to pay for this significant increase in production is not unexpected. The firm also announced this week that around 8k Model 3 orders have been cancelled and that it had scrapped roughly 4.4k that appeared to be duplicated. Analysts nevertheless remained upbeat, stating that pre-order numbers are “still very solid” and that some churn in pre-orders had been expected.

Tesla Motors said on Wednesday it would offer about $2 billion in stock, mainly to help it ramp up production of its new Model 3 electric car over the next two years.

The company unveiled the Model 3, its first mass-market car, in March and has been flooded with orders even though the compact sedan will not be available for a year or more. So far, Tesla has accepted about 375,000 $1,000 deposits from hopeful buyers.

Tesla’s chief executive, Elon Musk, has said the company aims to produce 500,000 Model 3s by 2018 at its factory in Fremont, Calif.

Many automakers would consider that a stretch, said Jessica Caldwell, a senior analyst at the auto researcher Edmunds.com. A typical auto plant makes 200,000 to 250,000 cars a year, she said.