Tesla Raises Warehouse Loan Agreement By $500 Million

Tesla

OCT 24 2017 BY STEVEN LOVEDAY 43

Tesla Model 3

Tesla Model 3 Production

According to The Street, Tesla has upped one of its warehouse loan agreements.

The Street points out that warehouse loans agreements are used to help finance inventory. According to last week’s SEC filing, Tesla has increased its credit line with Deutsche Bank to $1.1 billion, from a previous $600 million.

Tesla Model 3

Model 3

This is surely not the first time Tesla has increased its borrowing capacity. In fact, the automaker has done so several times recently, all related to the Model 3.

This is one of a few times now that the company has upped capacities even after CEO Elon Musk said there would be no need to do so. And then, four months later, Tesla increased its credit line further. In addition to all of this, the automaker raised about $1.8 billion in a recent junk bond sale, which was said to be utilized for the scaling of Model 3 production, among other things.

We don’t have any official details as to exactly what the additional funds may be earmarked for. However, Reuters reported that the company has said the money will be used to fund its lease program.

Tesla’s quarterly spending is increasing exponentially with Model 3 production and is expected to skyrocket in 2018. Nonetheless, the automaker’s cash situation is currently about as robust as it has ever been. Until the Model 3 ramp up hits high volume, we can expect that the company will be concerned about the impending cash burn and looking to insulate itself from any unforeseen hiccups.

Meanwhile, Tesla is working diligently to forever expand its global Supercharger network, has now started adding urban Superchargers, continues to expand the Gigafactory in Nevada, and is focusing a significant amount of energy and capital into its solar “Gigafactory 2” in Buffalo, NY.

Source: The Street, Reuters

Categories: Tesla

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43 Comments on "Tesla Raises Warehouse Loan Agreement By $500 Million"

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What’s another half billion in the cash incineration engine that’s already burned almost $2 billion so far this year.

https://az616578.vo.msecnd.net/files/2016/09/28/6361063492191613831337431414_maxresdefault.jpg

bro, Get Real is right: if you think we can’t clearly discern the image of an alt-right hound in this cartoon, all that Big Oil fume-sniffing has addled your mind.

*yawn*

Model 3 sales are projected to be 120 Billion over the life of the first generation, and it will be the base platform for the Model Y that is projected to be even bigger in its first gen. Not to mention that both will be the basis for future generations.

Sorry you are so short sighted.

_____________________________________

Same comment for all the BS though out the rest of this story.

Fixed that for you Nix:

“Sorry you are short Tesla.”

Oh, I think “Sorry you are so short sighted” to describe a short-selling serial anti-Tesla FUDster is a much better meme. It’s clever, it’s not-so-subtly to the point, and it’s worth remembering and repeating!

+1

Yeah when you see anyone complaining that Tesla is “burning cash” they really don’t understand the meaning of CAPEX or what Tesla is doing at all. Expanding car factories and battery factories are huge capital expenses. If you don’t understand that, you have a “short” agenda or just business-stupid.

Meanwhile, Panasonic is investing 800 Billion into their side of the Gigafactory and other production sites in order to increase production numbers. Spending money is business as usual for any growing company:

https://electrek.co/2017/10/25/panasonic-battery-production-tesla-gigafactory-1-other-factories-report/

LOL.
That is 800 MILLION, not BILLION.
And it makes great sense for Panasonic to invest heavily into both battery and solar.

Thanks for the correction, I clearly got that wrong, but the point is the same. Regardless of the actual dollar amount, my point is still that companies spend money to make money. That is how growth happens.

By all means Madbro, keep up your copying and pasting of the right-wing attacks on Tesla just because of your mental hatred towards all things Tesla.

It is because of people like you that out country is in the shape it is currently.

Lol. You obviously didn’t click the link. Shows how clueless you actually are when you comment.

No I saw your cartoon which is fitting because your whole mentally angry approach towards Tesla is cartoonish.

By cash incineration you mean building blocks to becoming one of the worlds largest companies?

No, no. There are a couple of guys that are just shoveling money into a huge furnace.
It’s just paper.

If you love America, you put money in its hole.

Now I too, am In the Know.

“There are a couple of guys that are just shoveling money into a huge furnace.”

😆 😆 😆

Ah, that explains it! I always wondered just what happened to all that money that Tesla haters keep saying Tesla is “losing”**. I’d think Tesla would keep better track of its investments… 😀

**Well actually they usually say “loosing”, but I doubt they really intend us to believe those investments are being set loose! 😉

“One of the world’s largest companies..”
Really, do you resort to exaggeration often?

What would the exaggeration be? They are in the Fortune 500, they are growing like crazy, their market cap is 1/10 on the worlds largest company and by revenue they could be in the top 100 by 2022.

And by reputation it’s already globally renowned.

M:
Their progress toward a high market cap continues unabated for now, though there are certainly measures of what is “large”, including such trivial metrics as revenue, products delivered, and (Gaia forgive us) delivery of earnings and cash.

The only thing growing is their debt and the number of lawsuits against them.

Sorry you are so short sighted.

(Aside to Get Real: See how well that works?)

Noone out there —

You seem blind to their growing sales, growing Assets, their growth of factories, growth of multiple new lines of business, etc.

Sorry you are so short sighted that you can’t even see entire factories and new lines of cars and other products growing out of the fire of investment.

I did a couple on Bob & Jim reporting from Tesla:
https://twitter.com/ffbj451/status/922881626723487745/photo/1

As far as the money goes it takes a lot of money to expand like the universe did in the first couple of moments of it’s early life.

From the article: “We don’t have any official details as to exactly what the additional funds may be earmarked for.” That’s because there aren’t any official details, and in mild defense of Tesla they don’t owe us any, but must merely keep the lien holders happy. “General corporate purposes” is the typical description on equity raises, purposes including (but never explicitly stated) “keeping the lights on”. It is reasonable to say that as a growing business Tesla will experience some challenge to maintain working capital and still generate positive Operational Cash Flow. However, they’ve really pushed that waiver to the limit and then some, with positive free cash flow being consistently rare, and when it does happen, fueled by financing. Tesla doesn’t make money; they RAISE money. But that’s between Tesla, its shareholders, lenders and underwriters. If all these parties are happy in the net, Tesla can do this… well, until they can’t. Interesting note: One year ago almost to the day (26 Oct, to be precise) the 19 major analysts following Tesla were greatly in the Buy/Hold camp, and projected 2017 non-GAAP EPS to be a positive and robust $1.50. That number is now at ($6.63) a mere one… Read more »

…and BTW “cash burn” is a common phraseology referring to the actions of a company whose cash generation meaningfully lags its consumption. It isn’t necessarily a terrible thing as long as the imbalanced flow has a foreseeable endpoint and the company is making measureable progress to that end. Generally doing it for years is frowned upon.

Scold AMZN all you want for being unprofitable in its early days — read the attendant 10Ks and see over and over again that Bezos emphasized vibrant and growing Cash from Operations. Hear, hear, sir Jeffrey.

Musk, OTOH, was an evangelist for Gross Margin, a metric for which you can invent boundary conditions and then declare yourself an “industry leader”.

In the old, obsolete world of accounting, the general rule is that Profit is an Opinion while Cash is a Fact. True that. And true as well that Musk has some very strong Opinions….

Another Euro point of view

“The financial community makes a TON of money off of the TSLA trade and from various banking fees”.

That said there is not much left to explain really.

LMAO, the self-appointed Guardian of the Galaxy/accountant/investor is realistically and desperately trying to ignore what Tesla REALLY represents: MASSIVE growth potential and with it massive profit.

Tesla auto is quickly building capacity to become the dominate luxury and sport EV brand.

Tesla follows an Apple ecosystem approach with its products.

all the while the competition alternates between whining about Tesla (like realistic as he unimaginatively copies and pastes his pessimistic FUD) and then rolling out concepts that will someday compete.

In the meantime Tesla will have far greater battery supply and an unassailable lead in DCFC as well as solar and battery storage products that complement their cars.

And of course Tesla Energy division is racking up powerpack/powerwall orders around the world and will eventually surpass the auto division in size.

As Nix pointed out above, Tesla’s Model 3 alone projects to 120 Billion in sales over its lifetime and will spawn the even more profitable Model Y derivative.

So go ahead and mortgage everything you have to short Tesla some more if you are brave enough-which you certainly are not.

Elon Musk has more talent at disrupting complacent industries and what is sweetest is that shorter trolls like yourself have helped finance Tesla’s growing strength.

Get Real: honey, I can’t find a single thing cut-and-pasted in my posts. Nuthin. Well, I did cut-and-paste the actual EPS estimates by slavish TSLA analysts, as well as their revenue estimates. But I really DO love to snip fun things, so let’s just use this wee bit from the 16 Sept 2016 SEC letter to Tesla, Page 6, Liquidity and Capital Resources, which states Tesla’s core challenge in cash burn with great clarity in this crisp demand: “In light of your disclosure that you anticipate significant capital expenditures, please expand your discussion to disclose your plan to finance those expenditures and your operations. Also, please clearly state that you have not generated positive operating cash flows in the past two fiscal years and when you anticipate that you will generate positive operating cash flows, if at all.” (This was of course a rebuff to Elon’s attempt to gloss over standard terminology for cash metrics with his “core operational cash” nonsense. But you knew that, yes?) FUDdy folks, those SEC types… BTW: while we’re on the topic of what you refer to as being “mentally angry” in your spittle-spattered rages against bro, you seem a bit peeved to be reading… Read more »

Earlier is was going to say, yeah it’s about 2 years ahead of where it should be and the money has been made on Tesla anyway.

@ realistic:

Thank you very much for that summary. Not being a “financial guy” I’m not in a position to judge its accuracy, but it certainly looks like you made a sober, clear-eyed and (dare I say it?) realistic attempt to describe an important distinction between Amazon.com’s obviously successful business plan, and Tesla’s apparently similar one. That seems to be a cautionary note, and one I have not read before. Perhaps Tesla’s finances are not in as good a shape as it appears to a layman such as myself?

I was surprised when Nix, 2-3 weeks ago, basically handwaved away the money Tesla is losing on the delay in ramping up Model 3 production as unimportant. If I was a TSLA investor, I don’t think I would be so cavalier about that situation.

Push/pull: Appreciate the acknowledgement (truly). I understand why people are Tesla fans. I have a very long history in electrification; looking back it has almost become a calling of sorts (though more by accident than intent). Though I’ve been bounced around in industry and am past peak earnings, I’m STILL in this game, working on electrification of off-road equipment (e.g. material handling and landscaping) and hybrid power for telecom where grids are poor/unreliable. So when the company IPO’d I was a fascinated bystander. I did purchase shares in the 90’s (with Put protection) and sold them off through the Sept ‘14 peak. What became clear to me was that Musk was a serial exaggerator, and that the company was too dependent on equity raises. Too much risk for me in a market where rational investment and modestly speculative trading would be a safer choice. Tesla doesn’t “cook the books”, so I would not imply that, but their public reporting has been considered somewhat aggrandized in its presentation, if not in facts. Shareholders haven’t complained much about it, so there really isn’t a giant problem. (Having said that I double dog dare anyone to unwind the SCTY accounting for non-controlling interests.)… Read more »

BTW, when I say “in the ’90’s” of course I mean in the $90 range.

Realistic is a long time serial anti-Tesla “concern” troll here for years now despite his hollow claims to “be in the game”.

Noticed how he avoids any replies to what I wrote on how Tesla is rapidly building much more capacity then the laggard OEMs to build and deliver large quantities of truly compelling long-range BEVs in the luxury/sport end of the market.

Evidenced by their wildly successful Model S dethroning the MB Slass and in just a few months we will see the Model 3 do the same to the BMW 3 series, Audi A4, MB
C class in this segment.

It is this fundamental that trolls like realistic avoid but the big institutional investors see and have no problem investing into Tesla because of its very large profit potentials as a much more forward looking company then the laggards,

I have no “concerns” beyond the intellectual integrity of the reporting about Tesla. Much is left out in the discussion every time. It deserves to be heard. And yes, I’ve been in electrification of products from aircraft to mowers and I have forgotten far, far more than you’ll ever know, I imagine. Please don’t think that there is not a huge heap of skepticism on the part of many, many working engineering and technical project management people observing the Tesla Phenomenon. Projections: I have no argument that people make huge projections about Tesla success. They’ve been doing so for a long time, and many of those projections (like profitability in ’15, then ’16, then ’17, and now maybe ’20) have ths far proven luducrously wrong. But there’s no good in arguing predictions. As for the success over MB: I suppose if winning niche market share by consuming over $3B in operations while taking taking on $Bs in debt with eroding margins and a B3 debt rating is a victory, then bully for Sir Musk. Most other manufacturers don’t get to do this. But I’m glad it makes you happy. As for this: “And of course Tesla Energy division is racking… Read more »

I don’t giver a rat’s ass about Tesla’s filings but I’m not trying to spread Fear, Uncertainty, and Doubt like you have been for years here.

Unlike you, I can see the forest for the trees.

When you euphemistically dismiss that Tesla has single-handily beat the most important model of the most renowned mass producer of luxury vehicles you are only showing your anti-Tesla bias.

Keep in mind that Tesla has done what NO OTHER American auto OEM has accomplished by beating MB and the Germans at their own game in this instance.

Real analysts and investors take note of Tesla’s accomplishments and find it wise to invest in such a successful enterprise with massive potential earnings built on solid engineering and expansion but maybe that is what is bothering you?

I get it: you think the financial risk in a publicly-held venture is inconsequential compared to what you want to believe.

And so you believe the last debt raise of junk (er, “high-yield”) bonds and continuing margin ersion are not meaningful.

I’m cool with that. You’re entirely entitled to your perspective.

But don’t say that delineating the actual fiscal performance of a business, as explained in their own filings, is “FUD”. It is measureable and indisputable fact. When a company with has used up over $3B in the course of Operations to deliver $21B in revenue BEFORE the purchase of Capital in a capital-intensive enterprise, its prospects are risky by any measure. I know they don’t teach that in Musk Worship 101, but it is true. Attemting to deny it by insulting the messenger makes you look stupid.

Perhaps because you are, of course, but that’s another matter.

Ooops, forgot this:

“Keep in mind that Tesla has done what NO OTHER American auto OEM has accomplished by beating MB and the Germans at their own game in this instance” And no other OEM anywhere has set fire to $3B and taken on $9B in debt to score that pyhrric victory while their Teutonic adversaries profits continue to rise, either, but OK. Go, Tesla!

GO TESLA GO DESTROY DIRTY GAS GUZZLERS and save humanity from fossil fuel industry

Another Euro point of view

Yes, I agree it is a good idea but it would be easier for others to follow if Tesla business would prove sustainable at some point. Alternatively maybe some sort of “non profit organization” could be put in place and probably there would be lots of people, (including me) that would agree to put some money in an EV company for faster transition to EVs. I have no problem with Tesla not making profits but I have a problem with pretending it does.

Have patience…Rome was not built in one day.

Well, they could start by not incinerating all that cash. That must add a lot carbon to the atmosphere.