Tesla takes on $30B in credit as it approaches unprofitability
3 hours ago
- Tesla secured $30 billion in loans from Citi and Wells Fargo, replacing a previous $5 billion credit line.
- The company faces declining profits and rising capital expenditures (CapEx), with CapEx doubling in the last quarter.
- Tesla expects to spend $25 billion in 2026, up from $8.5 billion in 2025, amid high tech spending.
- Profits have been razor-thin, and Tesla was cash flow negative in the last quarter for the first time since Q1 2024.
- Despite holding $43 billion in cash, Tesla took the loan to fund operations and speculative ventures like the Cybercab, Semi, and Roadster.
- Critics note that credit is expensive currently, and Tesla’s increased spending has yielded limited results so far.