Elon Musk, CEO of Tesla, confirmed amid the company’s record loss that he will not sell any stocks. Tesla’s Gigafactory 3 in China, although costing less than expected, will be built through local bank loans.
Musk told investors in a conference call on August 1 that he will not be selling any Tesla stocks and part of the funding for building and operating Tesla China will be gathered through local bank loans. The Chinese factory could cost as little as around $2 billion, less than half of the cost to build its U.S. equivalent plants.
The company has lost $717 million in the second quarter, the biggest loss in its history, which widened its total loss to $742.7 million. Tesla had been burning cash to intensify the development of its Model 3 sedan.
Nevertheless, the electric car pioneer said it’s on its way to reach profitability by improving margin and cutting costs. Musk has set the goal of a positive cash-flow by the end of 2018 and maintain it for every quarter after that.
Musk visited the world’s biggest auto-market in July and signed an agreement to build Gigafactory 3, a new electric vehicle manufacturing facility in Shanghai – also the first Tesla factory outside the U.S. The California-based automaker is now in the process of securing all necessary approvals and permits from local authorities.
It will take about two years before any vehicle will roll off the production line and another two to three years to ramped up to the factory’s full capacity which will produce 500,000 vehicles a year for Tesla’s Chinese customers.