Tesla's capital raise was widely expected. As of December 31, 2016, the Company produced and sold two fully electric vehicles, the Model S sedan and the Model X sport utility vehicle (SUV).
"We believe that Tesla has three key advantages: (1) a lead in battery technology cost; (2) unparalleled consumer awareness and brand; & (3) vertical integration that is not only brand reinforcing, but creates material cost savings in distribution - collectively these advantages could translate into an 800 bps+ profitability advantage long term vs. traditional OEMs".
And now Tesla is ditching the 60 kWh variant yet again.
Tesla (TSLA) had its price target raised to 240 from 220 on Monday by the brokerage firm Monness Crespi, which maintained a hold rating on the electric-car maker. So, the company ended up raising around $350 million more via common stock than had originally been planned.
He's assuming that Tesla will build 22,000 Model 3 cars this year, with 20,000 of that total coming in the fourth quarter.More news: Supreme Court nomination hearing for Neil Gorsuch gets started
The models can be ordered until April 16, according to the email announcement, after which the cheapest Model S version will be the 75 with rear-wheel drive and a 75-kwh battery at $75,700 to start (all prices include destination).
While raising cash isn't critical to releasing the Model 3, it would probably be wise, Musk said on the February 22 earnings call.
Tesla produced nearly 84,000 vehicles in 2016 and plans to make half a million in 2018, then 1 million in 2020. With the company planning to begin production of the lower-priced version in July, a fully optioned Model 3 could easily come close to Tesla's $68,000 starting price for Model S, creating some confusing choices for customers.
Tesla announced last week that it would sell $750 million in convertible debt and $250 million in stock. If they wanted more, they'll have to fork out $9,500 for an upgrade. This capital raise is meant to "de-risk" the company's financial condition as they focus on getting the Model 3 into production this year.
So, that means if you picked up a 60 or 60D you were probably struggling to get into the vehicle at all. In fact, he sees a "better than 50% chance Tesla will be reorganized in the next 12 to 24 months".