Tesla just borrowed $750 million, but that's nothing to worry about

Tesla Motors is getting a cash injection in the form a of a loan worth up to $US750 million from a series banks including Bank of America, JP Morgan Chase, and Deutsche Bank.

According to Tesla’s SEC 8-K filing, the loan has an initial value of $US500 million with another $US250 million available should certain unrevealed conditions be met.

Tesla’s cash injection may raise some red flags for those following Tesla, especially after company CEO Elon Musk announced during the company’s 2014 fourth-quarter earnings call that the company would not be raising any additional funds and the bulk of Tesla’s capital demands would come out of its operating cash flow.

However, Musk also stated, during the same call, that the company would need “staggering” amounts of capital expenditures.

So, nothing to worry about. Tesla is basically doing what it said it would do, with some help from Wall Street’s finest.

Tesla is a tech firm and very much of Silicon Valley. Other automakers admire and respect Tesla’s ability to make technology a bigger part of owning a car. But it’s always worth it to remember that Tesla is also building cars, too.

As a result, the company has to spend a lot of money. There’s R&D, there are factory hires. There’s paving the company parking lot. Millions of dollars worth of robots to build the cars. It goes on an on. Even so, Tesla is spending less than most well-established automakers.

Volkswagen Group, for example, will spend $US17.4 billion in 2015 just for R&D, the Wall Street Journal reported.

And Tesla has some favourable terms on its loan: it isn’t due to paid up until June 10, 2020.

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