Last year, Elon Musk, in an event, vowed that once the Autopilot system of Tesla completed the accumulation of sufficient real-world telemetry and data, the automaker brand will launch an over-the-air software update to all Tesla models, released after October 2016 for enabling full automation to the vehicles. Forced to choose between issuing a bit more of Tesla's turbocharged stock or tapping the overheated junk-bond market to finance the Model 3 ramp-up, the founder opted for the latter.
"His analysis came after Tesla announced on its website that it will be offering "$1.5 billion in aggregate principal amount of its senior notes due 2025".
But short sellers weren't the only ones with a dour opinion of Tesla.
Moody's assigned a B2 rating with a stable outlook.
The publication claims when asked about the current status of their relationship, Elon and Amber 'looked at each other and laughed'.
CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds "at least into mid-2018".
Future Tesla models understood to be in the works include an electric minibus, an electric HGV lorry and a second-generation Roadster - the original Tesla.
Tesla's bond will price later this week after several days of meetings with credit investors, who will weigh factors including the absence of a borrowing history, its lack of profit and its high cash-burn rate against its growth potential and its attractiveness as an environmentally friendly "green" issuer. Simplifying the distribution of electricity through a vehicle can have an impact on how long it takes to produce a auto in an assembly plant. At around $35,000, it's hard to make an argument for the Chevy Bolt or BMW i3 over the Model 3.
As for the base Tesla Model 3, we're still in the dark.
To illustrate what's at stake, let's imagine that Tesla does not raise money today, and a year from now, something unforeseen comes up: a supplier goes under, a recall happens, or there is an quake, and the company needs an additional $1 billion to fix the problem. Scaling up Model 3 production, in contrast, means dramatically increasing Tesla's monthly raw materials supply, battery production, and manufacturing speed.
Musk, 46, isn't one to dial down expectations or stay away from painting colorful imagery of his products. The sale was managed by Goldman Sachs Group Inc., Morgan Stanley, Barclays, Bank of America Corp., Citigroup Inc., Deutsche Bank and Royal Bank of Canada.
Shares of Tesla closed down 0.5 percent at $355.17 on Monday.