Following news of the one of the biggest solar and storage projects in the world completed in Hawaii last week, Tesla announced this week that it is offering $1.15 billion in stock options to get production of its Model 3 underway this year. The Model 3, though still as flashy as Tesla’s other electric vehicles, is the company’s first attempt at making a “Model T” type vehicle for the masses.
Tesla’s Model 3 is expected to start at $35,000 (before state and federal incentives). That’s compared to the Toyota Prius—the most popular hybrid vehicle, which has a base price of roughly $25,000 and the fully electric Chevrolet Bolt, which was introduced this year started at $37,000. The 2017 version of the Tesla Model S, the first model built and designed by Tesla and a more luxurious vehicle, starts at $68,000.
The new Model 3, which may include options like a solar panel that helps power its batteries and drive its motors, is slated for a release in 2018 with production beginning later this year. The production level are ambitious. The company, which also is growing its solar and energy storage businesses by leaps and bounds has begun manufacturing 2,000 vehicles a week. By the end of 2018 it said it will have produced 500,000 vehicles at its factories and plans to have produced at least 1 million vehicles by the end of 2020.
To help the Model 3 get off the starting line the company is offering $250 million of common stock and $750 million in senior notes. The company also is offering an option to its underwriters through an additional 15 percent of each offering, totaling roughly $1.15 billion in offerings, according to the company. Tesla CEO Elon Musk will purchase $25 million of common stock, the company added.
“Tesla intends to use the net proceeds from the offerings to strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes,” the company stated in a release.
This is on top of the news last week that Tesla and its subsidiary SolarCity completed the 13 megawatt (MW) Kapaia installation on Kauai in Hawaii. That it’s 13 MWs isn’t as big a deal as the fact that it includes 52 MW-hours of energy storage thanks to Tesla Powerpacks, and it does it costs that diesel can’t reach in the island. The project will deliver electricity to Kauai Island Utility Cooperative (KIUC) at 13.9 cents per kilowatt-hour. That’s lower than the 15.48 cents per kilowatt hour the utility pays for power from diesel plans and about half the 27.68 cents per kWh that Hawaiian resident pay for electricity.Tweet