- Daily Zen
We’ve known for a while that Tesla’s financial troubles are growing. Despite hitting Model 3 production milestone of 100,000 vehicles, Tesla owes over $11.5 billion (paywall) in long-term and convertible debt.
According to Bloomberg, Tesla and its CEO Elon Musk have roughly three months till those debt bills are due. Not it might not look like a ton of time, but it’s enough for a company like Tesla to secure financial sustenance. Despite all the manufacturing setbacks, Musk’s hasty tweets about taking Tesla private, and the U.S. Securities and Exchange Commission (SEC) suing him for fraud, the company’s stock has remained somewhat unperturbed. But then again, a lot could happen in the next three months.
Tesla has another big task at hand – to appoint a new chairman who will oversee Elon Musk. After a settlement with the SEC, the company agreed to replace Musk and name an independent chairman within 45 days, either from among its current independent directors or as one of the two new board members Tesla must add as part of the settlement. Rumors from last week suggested that 21st Century Fox CEO James Murdoch is being proposed as a possible chairman. Musk was quick to brush off those rumors.
The Palo Alto-based automaker also needs to ramp up production to generate enough cash to disburse its looming debt payments. Tesla owes over $1.5 billion in three months out of its total debt of $11.5 billion that needs to be paid back in 13 months’ time. In any case, Tesla doesn’t have a robust financial