Tesla has made some major changes to their banking credit in order to be able to invest more capital. Hence Musk has offered up the Fremont factory as collateral as Tesla’s existing 1.8BN dollar credit only has another 543M dollars left to use.
The 543 million dollars were released in a regulatory filing on Monday and are a reflection of the pace at which Tesla is “burning through money” according to a Reuters report quoting analysts.
“While not clear at this point, we suspect that with the large upcoming cash burn in 2Q18, the banks have demanded additional collateral protection for Tesla to maintain its $1.8 billion facility,” analysts from CreditSights said. Another source claims that the collateral was not demanded by the banks, but instead suggested by Tesla themselves, as they look to the second quarters expenses for the year.
Indeed Tesla had reported record losses once more during the Q1 Call but with Model 3 production getting on track, analysts were positive.
Elon Musk has also promised investors that the third quarter of the year will yield the expected profits, but at the same time, he also stated that the company did not need new funding. It is also important to note that, the company is far from bankrupt or out of options: Tesla holds multiple bonds next to the bank credit facility to fall back on if cash were needed. Elon Musk himself had just recently bought Tesla stocks worth 10 million dollars in an attempt to curb the business of short sellers that are in for the quick profit rather than longterm return.