Electric car manufacturer Tesla has made good on its promise of last week to bolster its cash position, announcing yesterday that it has raised $40m (£25m) from existing investors through the sale of convertible debt.
The company, which makes the high profile Roadster electric sports car, had last week fallen foul of reports that having recently laid off staff and delayed manufacturer of is Model S electric sedan it only had $9m left in the bank and was, as one Silicon Valley blog put it, "running on fumes".
That prompted a commitment from founder and chief executive Elon Musk that not only would outstanding orders for almost 1,200 of its sports cars be honoured but that the company would raise more than $20m in new funding.
Musk yesterday made good on that pledge, with the company announcing that $40m had been raised based on commitments from "almost all current major investors".
He added that while $40m is significantly more than the company needed, "the board, investors and I felt it was important to have significant cash reserves" .
The company said that the new financing would be used to accelerate manufacturing of the Roadster, as well as expand the company's electric powertrain supply business and continue future product development.
The improved cash reserves will also bolster the company's position as it waits for final approval on a proposed $200m loan that is expected to help fund the development of a new production facility for the Model S – a mainstream and more affordable all-electric alternative to the Roadster.
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