Elon Musk has told investors that Tesla will be worth $500bn thanks to a bet on “transformative” driverless technology that could turn its cars into a fleet of robo-taxis.
The billionaire, 47, unveiled a plan last week to raise more than $2bn (£1.5bn) in equity and debt, going back on previous assurances that the loss-making company would not need more money.
In a call with potential investors, Musk said Tesla could become a “half-trillion-dollar market cap company” due to its investment in autonomous driving technology. The company’s shares closed on Friday at $255.03, a 17% drop, to value it at $44bn amid worries about Tesla’s financial health.
Despite those concerns, and Musk’s long track record of calling for more cash after talking up Tesla’s financial strength, investors were undeterred. Tesla wanted to raise at least $2bn but ended up bringing in $2.3bn — $737m in equity and $1.6bn in debt. Musk put $25m of his own money into the deal.
The fundraising came just days after Tesla reported a $702m quarterly loss due to disappointing sales.
At an “autonomy day” last month, Musk made bold predictions for how he would turn the nearly 1m Tesla cars that will be on the road next year into robo-taxis capable of operating without a human driver. The plan was greeted with scepticism given the regulatory and technological hurdles.