Tesla's Musk sees 'modest' capital raise for next strategic turn

Wed Jul 27, 2016 2:31pm EDT
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By Joseph White

SPARKS, Nevada (Reuters) - Tesla Motors Inc's (TSLA.O: Quote) next strategic turn could cost the electric car maker "tens of billions" of dollars over the long term, but will likely require only a "modest" capital raise, Chief Executive Elon Musk said on Tuesday.

Musk's comments during a media open house at Tesla's sprawling, battery "gigafactory" outside Reno, Nevada, come at a time when the automaker is losing money and dealing with investigations into a crash that killed a driver using its Autopilot driving-assist software.

Musk seemed unwilling to let such speed bumps slow him down.

Last week he unveiled an ambitious plan to expand the company into electric trucks and buses, as well as car sharing.

On Tuesday, Musk said because the plan will roll out over a number of years, it could be mostly funded from sales of vehicles, particularly the Model 3 sedan due to launch in 2017.

While some analysts have questioned how profitable the Model 3 will be, Musk on Tuesday said he expects the car to generate $20 billion in revenue per year and $5 billion in gross profit once it is up to full production of about 500,000 vehicles a year.

"It's possible to fund quite a bit with that," Musk said, adding that not all the proposed new vehicles will happen simultaneously.

Musk said Tesla has finished engineering the Model 3 and he is confident it can launch production next summer.   Continued...

A prototype of the Tesla Model 3 is on display in front of the factory during a media tour of the Tesla Gigafactory which will produce batteries for the electric carmaker in Sparks, Nevada, U.S. July 26, 2016.  REUTERS/James Glover II