Tesla has secured $30 billion in new credit lines from Citi and Wells Fargo. The loan facilities are structured with terms ranging from one to five years. This capital injection comes as the company faces declining profitability and a significant rise in capital expenditures.
The company reported a 1 percent drop in sales during 2024, following a 38 percent growth rate in the previous year. Recent quarterly data indicates that Tesla has become cash flow negative for the first time since the first quarter of 2024, despite holding approximately $43 billion in cash reserves.
Capital expenditures more than doubled in the last quarter. The company expects spending to remain high as it funds various product development initiatives, including the Cybercab, Semi, and Roadster. These projects currently face challenges in production ramp-up or development timelines.
The new credit facility is equivalent to roughly one quarter of Tesla's current revenue. Management indicates that these funds are intended to support operating activities and finance ongoing ventures that have yet to generate significant revenue.
