High capital requirements for electric car manufacturers: Tesla needs 10 billion by 2020 – says Goldman Sachs

05/18/2018

High capital requirements for electric car maker Tesla needs $ 10 billion by 2020, says Goldman Sachs

AFP

Tesla Model 3 in a salesroom

Tesla boss Elon Musk wants his company but soon a new organizational structure miss with flatter hierarchies, However, he does not want one thing: to go through a capital increase in the near future. This year, Tesla will not have to raise any fresh equity or new debt, explained Tesla a few weeks ago in a message. As the usual standard credit lines and a higher cash flow from increasing sales are sufficient. In addition, Tesla wants Show stock market chart in the second half of the year Write profits,

Recently, the electric car manufacturer has put a lot of money in the startup of the Model 3 production: In the first quarter Tesla burned $ 7,430 per minute, the financial service Bloomberg recently calculated. In other words, from January to the end of March, Tesla had a negative cash flow of over $ 1 billion. For some time now, analysts have wondered if Tesla could run out of money this year. Elon Musk rejects that, but recently wanted to ask do not answer,

Now an analyst raises a new number: By 2020, Tesla could need up to $ 10 billion in fresh capital, according to a new report by investment bank Goldman Sachs, about the US business magazine Fortune reported, The electric car manufacturer will need this sum over the next two years to start production, launch new products and expand into China.

Tesla could spend for it new conventional or convertible bonds – or spend new shares, explains Goldman analyst David Tamberrino in his report. The company has several options open to refinance debt and raise additional money. However, each of these options have disadvantages, explained Tamberrino.

Model 3 production now reportedly at 500 cars a day

The issuance of new notes could adversely affect Tesla’s credit rating. The issue of new shares or convertible bonds in turn would dilute the shares of the current shareholders.

Tesla boss Elon Musk probably has recently cut costs significantly in order not to tap into the capital markets this year. The electric car pioneer probably also saves on warehousing in Europe, such as manager-magazin.de reported,

However, the electric car manufacturer is still struggling with problems in the production of his model 3. The self-imposed production targets Tesla has missed several times recently. By the end of this quarter, Tesla wants to get production of 5,000 Model 3 a week, compared to 2,270 vehicles per week in April

However, according to reports from the industry publication “Elektrek”, it was said to have done a bit better recently. According to Elektrek, in an internal email, Musk announced it was “quite likely” to reach a production capacity of more than 500 Model 3 a day this week. However, according to other reports, Tesla plans to let the Model 3’s production rest for six days at the end of May to make improvements to its facilities.

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