Tesla Discloses $1.1 Billion Third-Quarter Cash Needs

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Tesla Motors recently disclosed $1.1 billion in third-quarter cash needs in their filing. The company is currently working on their new sedan, Model 3, which is due to be launched next year.

In the latest sign of pressure on Tesla Motors Inc, the company disclosed $1.1 billion in third-quarter cash needs in planned expenditures. This is almost one-third of the cash on hand mid-year.

Currently, Tesla Motors Inc is busy constructing a massive battery factory in Nevada, called the Gigafactory. The company are also working continuously on their new Sedan project, the Model 3, which is slated to be launched next year. It is because of these two major projects that people have questioned if Tesla Motors Inc would require raising more funds in order to achieve its goals.

The Filing

The filing provided reveals that the company had $3.25 billion in principal sources on June 30, 2016. This amount included $1.7 billion it received from a public offering in May of that year as well as a credit line of $678 million. The credit line, as said by the filing, had been repaid in July. The company is also intending to repay in the third quarter the principle on $411 million of 2018 convertible notes. More amount could be spent on securities.

The filing to the U.S Securities and Exchange Commission also included the statement that the company would be using considerable cash amounts related to conversions of 2018 Notes and they might even pursue other actions in a bid to reduce their balance of convertible notes.

Apart from the filing, Tesla has made no comment on this issue. Reducing the two third-quarter payments from the mid-year cash balance would leave Tesla with $2.1 billion. Tesla told analysts that they planned $1.75 million on capital expenditures in the second half of 2016. The company also disclosed that its value of secured assets limits the ability to borrow under the asset-based revolving credit agreement with some banks as Tesla is looking to buy solar panel installer SolarCity Corp for $2.6 billion in shares.

Other Issues

Tesla, apart from this issue has divulged that the company has received information requests from government authorities and regulators from time to time. The agencies that have sent these requests include Securities and Exchange Commission and the National Transportation Safety Board.

Of these, SEC was reported to be investigating by the Wall Street if electric car maker had taken more time than they should have in disclosing the May crash in Florida where the driver using Tesla’s autopilot system had crashed his vehicle into a truck. Tesla, however, did not mention if the mentioning of correspondence with SEC was related to this or something else.