In push to get Model 3 to masses, Tesla starts raising cash

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Furthermore, Musk again refuses to disclose the battery costs of Model S, Model X and Model 3, but he insisted that they are significantly ahead of the competition.

To that end, Tesla (TSLA) said Monday it is raising $1.5 billion in a senior note offering. Most of that amount will be going towards boosting production at its Fremont, California assembly plant and a battery plant in Reno, Nevada.

Tesla burned through $1 billion in the second quarter preparing for the arrival of the Model 3, which is central to the company's growth strategy and broader goal of popularizing electric cars.

The news came at the same time as five members of the Italian Tesla owners club claimed to have travelled a record distance of 670 miles on a single charge of the Telsa Model S. Shareholders will look for Tesla to turn a healthy margin on the Model 3 at a time where consumers favour larger SUVs. Let us see if the company will achieve the target that it has set for December. Patience, though, has its rewards, as is the case with the Tesla Model X.

Now it has begun delivering its new, more basic and more affordable Model 3. But this valuation is based on expectations rather than current financials.

Becoming a viable, mass-market manufacturer is quite another - especially when the mass market for electric cars does not actually exist yet. The Chinese are racing to overtake him; they'll have three times the capacity.

Tesla's market cap surpassed giant automakers like Ford and General Motors earlier this year, despite its relatively tiny share of the auto market.

When Tesla has raised money over the past two years, it has sold more stock. Why not build up production more slowly?

The company's stock has added about 67% for the year to date, after peaking at a year-to-date gain of nearly 80% in mid-June.