For the last year, Elon Musk has insisted that Tesla can reach sustained profitability without raising additional cash from investors. But the company is now tacitly admitting that it was wrong, filing papers to raise another $2 billion by selling a mix of debt and equity.
Tesla is seeking to raise money just a few days after reporting an unexpectedly large loss in the first quarter of 2019. That release showed Tesla with dwindling cash in the bank—from $3.7 billion at the start of the year to $2.2 billion on March 31.
The lower cash balance primarily reflected one-time events—paying off a $920 million loan and having a bunch of cars in transit to customers at the end of the quarter. Still, having only $2.2 billion in the bank is a precarious situation for a company that has been known to lose more than $700 million in a single quarter.