The move is a predictable logistics change required to deliver 500,000 cars a year by 2018, up from the 50,000 cars the company shipped last year.
By the end of 2016, Tesla is expected to ship just under 80,000 cars for the year, so this massive growth will have to come in 2017 and 2018. In the third quarter of this year, the company finally hit its quarterly car shipment goals, following two consecutive quarters where the company underwhelmed with its shipment figures.
Many of the 500,000-car figure are supposed to come from Tesla’s planned upcoming car the Model 3, which isn’t scheduled to start shipping until the end of 2017
Tesla merger with SolarCity, which goes up for a shareholder vote in November, will require $12.5 billion in cash by the end of 2018 cash in four key areas, according to a note from Oppenheimer's Colin Rusch.
Specifically, Tesla will need to fund $5 billion to $8 billion (or more) in capital expenditures combining its stationary power business with SolarCity; another $2 billion in capital for the auto unit; as well as cash for working capital and operating lease obligations.