From Bloomberg:
Tesla to Raise $40 Million in Convertible Debt Offer (Update1)
By Alan Ohnsman
Nov. 3 (Bloomberg) -- Tesla Motors Inc., a maker of luxury electric sports cars, is raising $40 million in a private convertible debt offering after slumping equity markets scuttled plans for an initial share sale.
Most of Tesla's current large investors have committed to the fundraising, Chief Executive Officer Elon Musk said in an interview late yesterday. Musk, Tesla's main backer with $55 million of his own money tied up, said he's also investing more in the San Carlos, California-based company.
``It's a significant further commitment,'' said Musk, 37, without elaborating. ``We do feel this funding will take us to cash flow break-even. I'm hoping that will be by mid-2009.''
Closely held Tesla, pinched by the global financial crisis, cut its full-time workforce by 24 percent in October and said it will have a one-year delay to 2011 of its second model, a $60,000 sedan. Musk said the share sale that might have come as soon as this year is now scrubbed, with no new timetable.
``This is maybe the worst financial environment since the Great Depression,'' said Musk, who received almost $300 million from public offerings of online companies PayPal and Zip2 Corp.
Previous private funding rounds have raised $147 million, said Rachel Konrad, a spokeswoman. Investors include Google Inc. founders Larry Page and Sergey Brin and California-based venture funds Vantage Point and JP Morgan Bay Area Equity Fund.
$109,000 Sports Car
Tesla has delivered 50 of its $109,000 Roadsters to customers this year. Weekly production is now at 10 vehicles, and Tesla has set a goal of tripling that output by early next year. Tesla said it has orders for more than 1,200 cars from customers in the U.S. and Europe.
Roadster sales may be expanded to Asia in 2009, Musk said, naming Tokyo, Shanghai, Singapore and Hong Kong as potential markets.
Tesla's Roadster is produced at Group Lotus Plc's factory in Hethel, England. Final assembly takes place in San Carlos, where Tesla builds and installs the car's lithium-ion battery packs.
The Roadster can accelerate from 0 to 60 miles (97 kilometers) per hour in 3.9 seconds, Tesla says. The car can travel as far as 244 miles on a single charge.
To contact the reporter on this story: Alan Ohnsman in Los Angeles at
aohnsman@bloomberg.net
Last Updated: November 3, 2008 13:13 EST