Goldman Sachs: Tesla Needs $6B In Capital To Meet "Disruptive" Growth

Cameron Aubernon
by Cameron Aubernon

According to the financial overlords of Goldman Sachs, Tesla would need an $6 billion in capital within the next 11 years should its products become truly disruptive to the automotive industry.

Per Bloomberg, Goldman Sachs analyst Patrick Archambault delivered that number to his employer’s clients Wednesday, based on what he believes would be needed should Tesla’s electric lineup prove as popular as the iPhone 6 or Model T. The proclamation knocked the automaker’s shares down 1.7 percent to $259.32 on the trading floor in New York at the final bell.

Though Tesla CEO Elon Musk plans to sell a minimum of 500,000 units per year down the road, Archambault claims the capital needed would push annual production from 1.8 million to 3.2 million units by 2025. Other projects, such as the upcoming Gigafactory battery pack plant in Reno, Nev., would also need some of the projected $6 billion in additional capital. He adds that most of the $6 billion would be distributed from 2017 through 2025.

Meanwhile, Tesla has not given its own forecast for capital spending, according to representative Simon Sproule.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Conslaw Conslaw on Sep 25, 2014

    Tesla's market capitalization (the theoretical value of all of its outstanding stock) is already $31 billion. Most of that money the company never saw because it handed out the stock to insiders or the stock was sold early on when it was much less expensive. Still, it is likely that Tesla could raise all of the $7 billion in the stock market easily IF it were willing to devalue the shares of current stockholders. One way of minimize this is to do an issue of warrants (stock options) to current stockholders.

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    • Dr. Kenneth Noisewater Dr. Kenneth Noisewater on Sep 25, 2014

      @heavy handle Blah blah blah, buy some LEAP puts and cash in if you're so bearish on TSLA.

  • Conslaw Conslaw on Sep 25, 2014

    By the way, General Motors, Ford and Honda all have market caps in the low $60 billion range, about double Tesla's. Volkswagen's cap is $80 billion. In comparison, Toyota is a giant at $200 billion, but that's only half of Google's $400 billion cap. Apple is worth an additional Toyota at $600 billion, roughly 2 Walmarts. Do you love your PS4? Sony's market cap is under $19 billion, only 2/3s of Tesla.

  • Stuki Stuki on Sep 25, 2014

    11 years, huh. Precisely $6 billion! Wonder how much of the cost of that report the author will have to pay back when it turned out he was just pulling nonsense of of his rear? Of course, who cares about such pesky details as reality, when all money is created by the process of financing, and whether one gets financed depends on whether Goldman can pretend it's various assets are money good......

  • 95_SC 95_SC on Sep 26, 2014

    Screw it, If they are still around in 3-4 years I am going to shop them.