More details on TSLA's latest plans to gather more fuel for the fire:
https://www.reuters.com/article/us-tesl ... SKBN1AN13I
Tesla seeks $1.5 billion junk bond issue to fund Model 3 production
...Following the announcement, Standard & Poor's reaffirmed its negative outlook for the automaker and assigned a "B-" rating for the bond issue - deep into junk credit territory. S&P also maintained its "B-" long-term corporate credit rating on Tesla.
"We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns," S&P said in a statement on the bonds.
Moody's assigned a junk "B3" rating to the bond issue and said the company's rating outlook was stable.
The rating agency said the overall company's "B2" rating was supported by the fact that if Tesla ends up in serious financial trouble, its brand name, products and physical assets would be of "considerable value" to other automakers.
The automaker's debt load increased significantly last year when it bought solar panel maker SolarCity.
CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds "at least into mid-2018."
The latest effective yield on single-B rated bonds maturing in seven to eight years, the class for a Tesla issue, is around 5.5 percent, according to Bank of America/Merrill Lynch Fixed Income Index data.
Tesla’s bond will price later this week after several days of meetings with credit investors...
Tesla is counting on the Model 3, its least pricey car, to become a profitable, high-volume manufacturer of electric cars...
To sell the paper, Elon is upping his revenue prognostications using both higher production numbers, and higher model 3 prices:
https://electrek.co/2017/08/07/tesla-mo ... elon-musk/
Tesla Model 3 annual demand could surpass 700,000 units, says Elon Musk
...Goldman Sachs hosted a meeting with Tesla CFO Deepak Ahuja for bondholders to discuss the opportunity that the new bonds offer and Musk joined in on the phone to answer a few questions.
Two sources at the event told Electrek that Musk updated his projection to “700,000 units per year” and he added that he could see it eventually go even higher.
In comparison, BMW 3 Series and Audi A4, two vehicles against which Tesla hopes to compete with the Model 3 in the mid-luxury sedan segment, have annual production rates of about 400,000 and 330,000 cars per year respectively....
Furthermore, the CEO also updated his expectations for the average sale price of the vehicle.
Musk previously said that he expects the Model 3, which starts at $35,000, to have an average sale price of $42,000.
Today, he said that the average sale price should be closer to $45,000 once the vehicle is at full production. At first, Musk said the average price should be closer to $50,000 as Tesla limits the options to the long range battery pack and premium interior, which results in all Model 3 vehicles being delivered today costing at least $49,000.
... the new figures have a great impact on the overall estimated financial value of the Model 3 program, which was previously estimated as having a potential of about $20 billion in revenue per year.
Now Musk’s new projections put the overall annual revenue of the Model 3 program to over $30 billion per year....