On Wednesday, Tesla announced that it would sell $2 billion, yes billion, in equity to help finance its Model 3 production. Tesla has accepted about 375,000, $1,000 deposits for customers who want to buy the Model 3, however there is not yet a set date for the release of the Model 3. Tesla CEO Elon Musk said that he believes that the company will be able to produce 500,000 Model 3s by 2018, however this new round of fundraising makes me wonder whether they will be able to meet the 375,000 initial orders! Tesla has a history of not delivering things on time due to many issues with their vertical supply chain and given the sheer size of the initial order makes me wonder whether they have been able to fix these issues from shipping to battery production. Tesla plans its Model 3 to be the car that it moves down the market with and given Tesla’s immaturity within the industry, it remains to be seen whether Tesla can produce the amount it hopes to. A research analyst with Edmunds.com says that a typical factory output is between 200,000 to 250,000 cars per year and in the first 3 months of 2015, Tesla was only able to produce 15,000 cars. Moreover, its current models cost $75,000 (Model S) and $80,000 (Model X) and the Model 3 will be priced at $35,000. Whether this price is profitable for Tesla I do not know, but currently they are not making money and are relying solely on government credits that they sell to other OEMs for profit. Another thing is that Tesla has recently had two execs leave the company: Greg Reichow, VP of production and John Ensign, VP of manufacturing are both leaving the company which makes me wonder if there are issues that have not been announced to the public that has caused their departure. “In the first quarter of this year, Tesla lost about $283 million on revenue of $1.15 billion. During the same period last year, it reported revenue of about $940 million and a loss of $154 million.” This data is not encouraging however an analyst for Goldman Sachs recently changed his recommendation of Tesla from Neutral to Buy, causing Tesla’s share price to rise. In conclusion, I am still doubtful that Tesla will be able to keep to their goal of 500,000 cars by 2018, let alone meet the 375,000 in Model 3 pre-orders. If this is true, then it could be a total disaster for the company and its shareholders.