Last week, Elon Musk, the CEO and Chairman of electric vehicle maker Tesla, revealed that the company only had $9 million in the bank and was looking to raise a more than $20 million internal round from existing investors. This turn of events came after the company burned through most of the $145 million it had previously raised and was unable to raise another $100 million round on the terms it wanted, due in part to the credit crunch. Well, tonight Tesla gives more details of this planned financing and the company says it is working on $40 million in convertible debt financing from existing investors.
Tesla says in a press release that its Board of Directors has approved $40 million in convertible debt financing based on commitments from existing investors and that the funds will go toward getting the Roadster to customers. Musk says in the release that $40 million is more than the company needs, but that it’s important for the company to have “significant cash reserves.” After seeming to continuously overspend, that’s probably a pretty good idea. Musk, who already invested $55 million into Tesla, has also personally promised that Roadster customers will receive their cars, so that likely means he’ll be putting some into that round, too.