Tesla plans US$5b in third capital raise this year

Tesla aims to raise US$5 billion through a stock offering, while chief executive Elon Musk has apparently moved from California to Texas.

The EV maker is taking advantage of its surging shares by going back to the capital markets for the third time in 10 months following an issue of US$5b shares in September and a US$2b offering in February, Bloomberg News reports.

That has helped Tesla more than double planned spending on plants and equipment this year with the new money going to support plans announced in October to double its capital-expenditures budget during the next two years to a range of US$4.5b to US$6b, Bloomberg adds.

Tesla has soared about 650% this year and the new raise could lead Tesla’s cash balance to approach US$20b, Bloomberg Intelligence credit analyst Joel Levington says.

The opening of Tesla’s Shanghai Gigafactory, addition of the Model Y, advances in battery technology and anticipation of inclusion into the S&P 500 Index has led investors to assign Tesla a much richer valuation than any other auto manufacturer in the world, Bloomberg says

Tesla is also building a new factory in Austin, Texas, where Musk is reported to have moved after becoming miffed about Tesla’s treatment in California during the COVID-19 pandemic and a belief California is taking innovators for granted.

A Gigafactory near Berlin is also under construction, although having some hiccups in progress.