Tesla Model 3: On Junk Bonds, Production, and Batteries
Considering the hype for Tesla Motors' Model 3, the company is being pressured to deliver with the fastest production possible. Before that, Tesla would have to have the funds necessary to ramp it up, and recent reports reveal that Tesla Inc. is looking to raise about $1.5 billion through stock junk bonds.
"Bond investors, who typically don't love companies that don't make money, will be far more forgiving when it comes to Tesla," said bond expert Robbie Goffin, managing director of FTI Consulting, citing the company's stellar stock market value.
The move of the company represents Tesla chief executive officer Elon Musk's bet that the Tesla Model 3 will be a hit. And given the current hype for it, Musk might not be mistaken in his predictions of how the Tesla Model 3 will get bond investors as well as stock investors interested in looking into his company.
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While pitching to potential investors, Musk is also busy in making sure that the automobile market remains interested in the upcoming Tesla Model 3. The unveiling gave away cars to those who were able to pre-order, which were mainly Musk's employees, and by doing so, he got most of the world looking at his direction. In an attempt to apply what he learned from the previous models, Musk has reportedly revealed the batteries that will come with the Tesla Model 3.
According to reports, the Tesla Model 3 will have two battery variants: 50 and 75-kilowatt-hour batteries. This means that the variants will be mostly the same, save for the fact that the 75 battery is meant for long-range driving. Furthermore, Tesla will prioritize producing the long-range, single-motor variants over the dual-motor, with the latter expected to ramp up production by 2018.
Although the Tesla Model 3 still remains to be equipped with a hefty price tag, fans are definitely looking at it as something that is affordable in the long-run, just like Musk said it would be.
