Tesla Won’t Need More Cash For SolarCity Merger, Musk Tweets

Tesla and SolarCity won’t need to ask for more cash this quarter as the two companies prepare for a merger, according to a tweet by CEO Elon Musk.

On Sunday, Musk posted comments on his Twitter page. He would “like to correct expectations that Tesla/SolarCity will need to raise equity or corp debt in Q4. Won’t be necessary for either.”

In response to a tweet asking if the first quarter of 2017 was likely for it to happen, Musk replied, “Probably not then either.”

The automaker is planning to raise additional cash during the fourth quarter to prepare for production of the Model 3. In an email sent to Tesla employees on Aug. 29, Musk said that the automaker needed to raise more cash for the new sedan.

Soon after Musk announced a proposal to acquire SolarCity in June, investor skepticism led to a 10-percent plunge in stock prices the next day. While car sales surpassed expectations in the third quarter, profit continues to be elusive.

The proposed merger is expected to soon go for final vote by shareholders of both Tesla and SolarCity.

Musk has been continually asking backers for more funding. That could be a tough sell right after Goldman Sachs has downgraded Tesla share value. Goldman Sachs followed another Wall Street institution, Morgan Stanley, in doing the same.

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Funds will also be sent to doubling the size of the Fremont, Calif., Tesla factory, assuming plans go through. The electric automaker just filed municipal zoning documents for the plant’s production capacity increase, according to The Wall Street Journal.

Tesla reported Friday “adequate liquidity” through the end of the fiscal year coming from current operations, but there are plans to raise additional funds before the year ends. That dollar amount hasn’t been determined yet, the company said in a Securities and Exchange Commission filing.

In one of Musk’s tweets posted on Sunday, he said there would be a “Tesla product unveiling on the 17th (unexpected by most),” followed by yet another unveiling on October 28 – a combination of solar power, battery storage and electric-vehicle charging systems.

Automotive News