The Model 3's $35,000 starting price - half the cost of Tesla's previous models - and range of up to 310 miles (498 km) could bring hundreds of thousands of customers into the automaker's fold, taking it from a niche luxury brand to the mainstream.
Tesla said on Monday it would raise about $1.5 billion (€1.27 billion) through its first-ever offering of junk bonds as the United States luxury electric vehicle maker seeks fresh sources of cash to ramp up production of its new Model 3 saloon.
Volkswagen has launched a Cash-for-Clunkers-like program in Germany to get its oldest diesel vehicles off the roads. In March, the company raised $US1.4 billion through a convertible debt offering. S&P Global Ratings affirmed its B-minus rating on Tesla, saying the boost to liquidity should offset the company's "significant execution risks". The team of five Italian Tesla lovers took this on as a challenge and using hypermiling techniques, they broke the June record. The more money Tesla borrows, the riskier the deal will become for lenders.
Ultimately, the depth of investor interest will determine the bond's interest rate.
Safety regulations may force Tesla to adopt physical mirrors rather than cameras for the production Model Y, which is pencilled in for 2019 - although it could come as late as 2020.
But now it seems that Tesla is stepping its steps back from its promise, by developing this new hardware suite and as reported by Electrek if its current Full Self-Driving Capability system falls short, the new device, dubbed "HW 2.5" will be pushed out to the market.
Musk previously stated that the Model 3 will generate $20 billion revenue with $5 billion gross profit, which equates to a margin of around 25 percent on every Model 3 sold. Elon Musk will keep burning through cash to ramp up production, which will likely require more bond issues in the coming months.
Of course, Tesla bulls will point to the company's bright future.
Musk also said on Twitter that there were "dozens of bogus anecdotes" that he could cite and even offered to provide a list after several fans voiced support.