Tesla says it needs $3 billion to stay in business
US car-maker claims it will raise the cash though debt and selling stock, Elon Musk blamed for overestimating Model 3 revenuesTesla has announced that it will raise $2 billion ($A2.9bn) through debt and selling off shares following reports that its CEO, Elon Musk, had overestimated the ability of the Model 3 to generate enough cash for the company to be self-sustaining.
The dash for cash began late last night when Tesla confirmed it would sell about $650 million ($A930m) in shares, with the rest sold as debt.
Despite the announcement it needed a cash lifeline, Tesla's share actually rose 4.4 per cent in early trading, although overall the US car-maker's worth is still 30 per cent less than it was at the beginning of the year.Last year Musk declared in numerous interviews that Tesla would no longer need to raise capital to stay afloat but following a decline in vehicle deliveries in the first quarter has was forced to reconsider.
As part of the revenue raising, Musk himself has declared he will lend financial assistance by outlaying $10 million ($A14m).
Musk has now told investors that following the cash injection, Tesla will return to profitability in the third quarter.Tesla is expected to splash out on a further $2.5 billion ($A3.6bn) in the near future to develop new vehicles that include the Model Y, its truck and a replacement for its original Roadster.
The car-maker has also confirmed it will build a new battery and manufacturing facility near Shanghai later this year.
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