Tesla said Monday that it is in a period of "rapid scaling" following the July launch of the Model 3.
The company's stock has added about 67% for the year to date, after peaking at a year-to-date gain of almost 80% in mid-June.
Moody's disagreed and said Tesla faces "significant risks" as it attempts to take production to that level: "This targeted plan could put full-year production in excess of 350,000 units". That's a far cry from the 5000 run rate promised by Tesla for this year end, let alone the 10000/week target for 2018.More news: Sexual Harassment Allegations Leveled Against Fox News' Eric Bolling
Tesla will raise the money by selling bonds to professional investors, despite the company having $3bn in cash.
The first look at the Tesla Model 3's interior demonstrates just how advanced Elon Musk's vehicles have become. That's still a good place to be from a cash perspective, and it nearly guarantees that Tesla will sell all of the vehicles it can produce not only this year, but also for all of 2018. The company produced nearly 84,000 cars and sport utility vehicles past year.
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Musk said on a quarterly earnings conference call last week that the company was considering raising debt, but not equity. "Obviously, that's like the promised land right there". This is key to the company's short-term customer relations and long-term survival, as the Model 3 is now amassing some 1,800 reservations per day.
The bond sale is the latest in a series of moves Tesla made to pad its coffers this year.
Moody's Inverstors Service assigned Tesla a B2 corporate family rating and slapped a B3 rating on the company's offering of senior unsecured notes. "Tesla's a company that's always on to the next big innovation or the next big advancement and they raise money well in advance of when the public finds out about that".
Last week, when the firm revealed its earnings for the three months through June, Tesla showed that it still had $3 billion in cash on hand. The company sold about $965 million in convertible notes and $400 million in stock in March.More news: Mueller Asks White House for Documents on Flynn
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.