Ever since bursting onto the scene in 2003, Tesla has been trying to revolutionize the electric vehicle industry. The company is finishing construction of a massive battery factory in Nevada, known as the Gigafactory, and is ramping up production of the Model 3, their new mass-market sedan.
As a result, Tesla has disclosed $1.1 billion in third quarter cash requirements for their payments and planned expenditures. That's about a third of the cash the company had on hand mid-year, which may indicate a need to raise new cash in order to actually achieve its goals.
Tesla has already spent more than $117 million on construction of the Gigafactory, and estimates it'll spend nearly $520 million on it in 2016. The company admitted that the building and operation of the factory could exceed the company's expectations.
In the filing, Tesla said that it had $3.25 billion in principal sources of liquidity as of the end of June. Included in that total is a $1.7 billion public offering in May, as well as a $678 million credit line. According to the filing, that credit line got repaid in July, and the company intends to repay principal on $411 million of 2018 convertible notes in the third quarter.
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Subtracting those two payments from the mid-year cash balance, Tesla would have $2.1 billion left over. $1.75 million of that would go to capital expenditures during the second half of the year.
CEO Elon Musk suggested the company might require a "small equity capital raise" next year. Tesla is in talks to buy solar panel installer SolarCity Corp for $2.6 billion in shares. Currently, Tesla has an asset-based revolving credit agreement with a syndicate of banks. The value of its secured assets has made it more difficult to borrow from those banks.
Tesla also has to deal with requests from regulators. The National Highway Traffic Safety Administration is looking into a crash from May in Florida, when a driver using Tesla's auto-pilot system crashed into a truck and died.
The Securities and Exchange Commission is also looking into the case, but for a different reason: they're trying to find out if Tesla took too long to disclose the crash. The crash occurred on May 7, but news of it didn't come out until June 30. At the time, Tesla said it hadn't received any communication from the SEC.
Resolving these matters may result in even more money Tesla will have to spend this quarter and year. Even if it doesn't, it's going to go through a lot of cash. The company is just hoping its investments result in a big boost in earnings.
