Tesla Announces Plan to Raise $2 Billion from Investors

Tesla plans to raise $2 billion from investors, easing fears about liquidity.

Electric vehicle maker Tesla announced today that they are planning to raise an additional $2 billion from investors this year, easing market fears about the company's liquidity.

Tesla Seeking $2 Billion in Additional Investment

According to a new report by CNBC, Tesla said today that the company was planning on raising an additional $2 billion from investors this year, including a personal investment from Tesla CEO Elon Musk of $10 million, easing market concerns about Tesla's cash liquidity after Tesla's first quarter filings showed the company had spent about $2 billion in cash and posting a $700 million dollar loss for the quarter.

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On a call with investors earlier this month, Musk had been non-commital when asked about raising new capital for the company. "“I don’t think raising capital should be a substitute for making the company operate more effectively,” he said. "“I do think there is some merit to raising capital, but this is sort of probably about the right timing.”

When first announced, shares in the company fell briefly but quickly rose once details of the plan became known. The company plans for a $1.35 billion investment from convertible notes and $650 million in new equity investment, $10 million of which will come from Musk.

“There was growing fears that this company was going to need incremental cash going to the second half of the year. For the first time, they listened to investors and the math doesn’t lie in terms of what they needed to do,” Dan Ives, managing director of equity research for Wedbush Securities, told CNBC. “Now there’s a relief because the liquidity issue and the finance concern could be put to rest in the near term.”

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