Tesla is planning at least three more Gigafactory locations

Andrew Cummings
February 25, 2017

"According to our financial plan, no capital needs to be raised for the Model 3, but we get very close to the edge", he said. This core group will be more tolerant of any early bugs in the product while also being able to provide more concise feedback to the Tesla team.

Tesla Inc Chief Elon Musk has taken big risks repeatedly since going public in 2010, but investors were spooked on Thursday after he said the electric vehicle company could get "close to the edge" as it burns cash ahead of its crucial Model 3 launch.

All that comes on the heels of a Q3 in which the company posted a rare profitable quarter that CEO Elon Musk called Tesla's "best quarter ever".

Brian Johnson, an auto analyst at Barclays Plc, said in a report Wednesday ahead of Tesla's earnings that he would "not be surprised to see a $2.5 billion raise instead of the $1.5 billion equity raise now reflected in our model".

Given Tesla's elevated stock price, many analysts believe Tesla will seek a capital raise in coming months.

Tesla posted mixed results in the first earnings data seen since the company acquired SolarCity a year ago.

"The recent run-up in Tesla stock has less to do, in our view, with anything around the near-term financials, and more to do with the almost superhero status of Elon Musk", Brian Johnson, an analyst with Barclays Plc, wrote in a note to clients Wednesday before results. Tesla has received more than 373,000 pre-orders for the $35,000 mass market sedan since March of a year ago.

By 2018, Tesla hopes to be producing 10,000 vehicles a week.

Yet Musk maintained the company is on track to generate $500 million in cash from its energy generation and storage business by 2019.

But it turns out limited production is still due to commence this July, before things move towards full-scale production during the start of September.

The electric auto maker said it expected to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017. That said, the Model 3 is said to be a much simpler vehicle to manufacture, thereby reducing the likelihood of any delays.

Musk did reveal though that the manufacturer is looking for a cash injection to ensure it can release the vehicle under the current schedule.

According to a company blog post, Tesla CFO Jason Wheeler will be departing the company in April.

Tesla is planning to finalize the locations for three more Gigafactories later this year, the company revealed in its shareholder letter for the fourth quarter of 2016.

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