Tesla to Raise $783 Million Through Debt Sale Secured by Prime Auto Leases

Tesla is set to raise $783 million by selling debt backed by prime automotive leases, Bloomberg reported. The deal, led by Societe Generale, is expected to be priced next week, marking Tesla's second asset-backed security transaction this year as it seeks additional funding without incurring further obligations.

Tesla's $783 Million Debt Sale, Led by Societe Generale, Marks Second ABS Transaction of 2024

Tesla is expected to raise additional funding by selling debt secured by automotive leases. According to a report, the debt sale could be priced as early as next week.

Bloomberg, citing an individual who requested anonymity, reported on October 3 that Tesla is pre-marketing a $783 million debt sale secured by leases from prime debtors. Societe Generale, a French company, purportedly leads the transaction, which is anticipated to be officially priced next week.

Bloomberg also explains that Tesla priced a $750 million ABS deal with a 5.53 percent coupon on its top tranche.

Automakers are increasingly engaging in asset-backed security (ABS) sales, and this debt transfer would represent Tesla's second such transaction this year. This agreement enables Tesla to access liquid finances without incurring additional obligations that could result in increased expenses.

Tesla's securitizations amounted to approximately $4 billion last year, even though the company has not resorted to securitizations as frequently as many legacy manufacturers. For instance, on October 3, Ford announced a $1.7 billion agreement.

Tesla Prepares for Robotaxi Unveiling and Q3 Earnings Call Amid Record Energy Deployments

The announcement is also made before Tesla's Robotaxi unveiling event on October 3, which is expected to be a critical moment for the company. The event is titled "We, Robot." For years, Tesla has been hinting at a Robotaxi platform built on its camera-based Full Self-Driving (FSD) software. Earlier this year, the company publicly disclosed preliminary images of a ride-hailing Robotaxi platform.

Tesla will also conduct its Q3 earnings call on October 3, even though the company already reported delivering 462,890 vehicles in the third quarter earlier this week. Tesla has also exceeded its energy deployments for t023 with one full quarter remaining, as the company announced the deployment of 6.9 GWh of its Megapack and Powerwall energy storage products.