Ever since the plans for the cheap and cheerful Tesla Model 3 were made public last year, there has been a lot of attention paid to the debate around whether or not Elon Musk’s ambitious firm will be able to meet expectations in terms of production output.
There is no question over whether there is demand for the Model 3: more than half a million pre-orders have already been placed. But prospective investors in Tesla are trying to work out whether Tesla can build enough to satisfy this demand as well as whether the cost of creating the cars will leave enough room for profit.
Now a scheme to sell bonds worth $1.5 billion (£1.15 billion) on the financial markets has been introduced by Musk, according to the Independent. Unsurprisingly, this is all about drumming up the cash to improve its production capacity as it courts the mass market.
Essentially, this move will allow investors to take a stake in Tesla’s success that they can cash in on once the Model 3 has the desired effect on the market and the factories are producing cars smoothly.
Of course, Tesla itself is not completely without resources: an estimated $3 billion (£2.3 billion) in cash is available to it at the moment. It also generated $4 billion in sales during the first six months of 2017, which more than doubles its record from the same period last year.
However, it is already committed to using much of this to not only expand its factories so that the Model 3 can be built quickly enough to fulfil the orders that have already been placed but also to create battery production facilities.
Those looking into Tesla hire in London, or perhaps considering placing a pre-order for the Model 3, will no doubt be aware that even with the added investment, it will take a year or more for the finished vehicles to arrive with customers. This has not de-railed the hype surrounding the car, about which even more is known following the recent launch.
One thing which has emerged in the wake of this bond offering is a more concrete idea of the kinds of battery capacities that the Model 3 will offer. The basic model, with a range of 220 miles, is set to come with a 50kWh pack, while the costlier long-range version will sport a 75kWh set-up, bringing its range to over 300 miles.
The capacity of the batteries used has been a source of interest for investors because this changes the manufacturing costs. And with Musk already committing to a $35,000 price point in the US, any changes in the expense of procuring components will likely have to be covered by the company rather than its customers.
Taking advantage of Tesla hire in London is one of the ways that the firm is helping to gain traction in the UK. The plans to pique investors’ interest will be welcomed by fans of the firm.