Buttons are dashed in Tesla Model 3

Tesla Model X

Considering Musk's concerted push to make Tesla's cars autonomous, it's not surprising that he's willing to bet that stripping the typical creature comforts from the interior of the Model 3 will be fine. The credit rating agency also assigned Tesla a Corporate Family Rating (CFR) of B2, based on the expectation that Tesla can ramp the Model 3 and sell 300,000 units during 2018 at a gross margin of around 25%. Berenberg Bank raised Tesla from a "hold" rating to a "buy" rating and lifted their target price for the stock from $193.00 to $464.00 in a report on Tuesday, June 13th.

Investor enthusiasm has catapulted Tesla's market value past General Motors Co. and Ford Motor Co., but bringing out the Model 3 has been costly.

Ultimately, the depth of investor interest will determine the bond's interest rate.

Elon Musk-led Tesla is counting on the Model 3, its least pricey vehicle, to become a profitable, mass market electric auto maker. Rather, Musk is showing his company's commitment to them by not diluting their stock with an equity sale.

When Tesla first introduced the Model X, Elon Musk said that it would cost about $5,000 more than a similarly equipped Model S. If you look at current pricing, this statement remains untrue.

According to a report from Reuters, several analysts had concerns the Model X would suffer due to the cheaper Model 3, which is going for $35,000. "Obviously, that's like the promised land right there".

Tesla recorded revenue of $2.79 billion in the second quarter, up 34% from a year earlier.

The bond sale is the latest in a series of moves Tesla made to pad its coffers this year. Insiders sold 241,980 shares of company stock valued at $74,834,109 in the last quarter. "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". In other words, if Tesla can deliver on its production timeline, Tesla stock could be headed higher, boosted by strong Model 3 sales. The rush of pre-orders allowed Tesla to recently become the biggest United States vehicle company in terms of market capitalisation, despite the fact that General Motors (GM) and Ford produce millions of cars per year and Tesla has yet to make a profit. A fully loaded Model 3 would cost almost $60,000 today.

The company said a week ago that it was averaging 1,800 reservations for the new vehicle each day.

Tesla is slowly beginning to face stiff competition from other countries as the world races toward lithium ion battery mass production.

Tesla, which also makes batteries and solar panels, has been burning through its cash at a rapid rate.

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