Tesla posted a $700 million loss in the first quarter of 2019.
When the electric automaker’s cash reserves shrank by $1.5 billion since December, industry analysts said Tesla would need to raise cash to fund its ambitious plans. Now, the company announced it would do just that, offering to raise more than $2 billion as part of a stock and debt offering.
Tesla announced Tuesday it would raise capital in two separate offerings. First, it would offer $650 million of common stock. The other $1.35 billion will come in convertible senior notes — a type of debt where underwriters can either be repaid on the loan or convert it into shares of common stock when it matures in 2024. The company’s painful losses in the first quarter follow two back-to-back profitable periods in late 2018.
According to a recent letter to investors, the company expects $2 billion to $2.5 billion in capital expenditures this year. Beyond that, it may spend $2.5 to $3 billion annually over the next two years, according to an Associated Press report. The money from this capital raise will fund the Shanghai Gigafactory and development of the upcoming Model Y crossover.
