Tesla wants more cash amid expansion, SolarCity buyout

Tesla Motors is hoping more money won’t bring more problems, as the California-based electric-vehicle maker braces itself for the ramping up of its Nevada Gigafactory as well as its buyout of SolarCity solar-energy provider. The automaker
filed documentation with the US Securities and Exchange Commission (SEC) today about the SolarCity merger-voting process, and included information about a possible sale of either debt or equity for fund-raising purposes. The company didn’t say how much money it wants to raise.

As of June 30,
Tesla had $3.25 billion in cash, up from $1.2 billion at the end of last year. Since then, though,
the company paid down a credit line by almost $700 million,
Reuters noted. Additionally,
Tesla earlier this month agreed to acquire SolarCity (Tesla chief Elon Musk is SolarCity’s chairman) for $2.6 billion in stock.
Reuters quoted a University of Michigan business professor as calling SolarCity “a virtual sinkhole for capital,” so with that in mind, Tesla looking for more of a cash cushion.
SolarCity took a $375 million loss last year after losing $769 million in 2014.

Gartner transportation analyst Mike Ramsey
noted in a Tweet that Tesla’s previous efforts to raise cash haven’t impacted the company’s stock price. Indeed, Tesla’s shares were little-changed today, though the stock has fallen about 15 percent during the past year.

Meanwhile, Tesla, which has never made an annual profit and last had a profitable quarter more than three years ago,
held the grand opening for its massive Gigafactory in Nevada late last month. The plant is estimated to eventually cost about $5 billion, and it’s vital to the company’s goal of making enough batteries to bring down component costs for the lower-priced Model 3.

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