It has recently been confirmed that Tesla Motors Inc. is going to sell $2 billion of their stock to aid the company in financing the rapid launch of its new vehicle: Model 3 electric sedan.
Last Wednesday, May 18, 2016, Tesla Motors announced that they will be selling a part of their shares to help the company in the launch of Model 3, which has now been accelerating. They offered about $2 billion in shares and the CEO, Elon Musk, will sell the remaining shares to deal with the tax obligations. It was estimated that the company only needed to raise $1 billion to fund the launch of Model 3 production. These funds are assured to be used to help the company meet the huge demand of their new product. As of last month, the company has reportedly already received almost half a million orders for Model 3.
After the report of their earnings for the first quarter, Musk said that the company will definitely have some aggressive action towards the high demand of their vehicles, about half a million in two years. Their original target was initially on the year 2020, but it has now been set two years early. Tesla also added that Musk will donate $1.2 million shares of his stock to charity, since his overall stake will definitely increase after closing all of their scheduled transactions.
Model 3 is a smaller, less expensive car compared to the others that Tesla has built. It also costs much lesser, hence the high demand of this new product. With this new model of an electric sedan, Tesla has also constructed a battery factory in Nevada to provide the lithium-ion cells that they will need to create the battery pack for all those cars. The markets closed last Wednesday and the shares fell about 4% in trading.
Tesla Motors Inc. said that their company has intended to deliver the Model 3 by the end of 2017. That is only to begin the half a million purchases by the end of 2018.
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