Tech tycoon burns through £1bn to build new Tesla car

PIONEERING electric car maker Tesla burned through almost £1bn in three months as it prepared to bring its hotly tipped Model 3 car to market.

The firm said the money was spent on building up factory capacity for the new vehicles and boosting battery output.

The Model 3 is Tesla’s most affordable car yet and costs around £27,000. It can go from 0 to 60 miles per hour in less than six seconds and seats five adults – but is smaller than the Model S, which costs £57,400 and seats five adults and two children.

Demand was thought to have exceeded 500,000 orders but Tesla founder Elon Musk ( pictured) yesterday admitted around 63,000 had been cancelled – with numbers dropping to 455,000 from about 518,000.

Musk downplayed the cancellations and said buyers were most likely put off by the wait. In order to be put on the waiting list for the Model 3, customers have to place a £775 deposit, but many will not get their keys until the end of 2018. His comments came a day after the firm posted a boost in second quarter sales but widening losses. The company reported a loss of £256m compared to a loss of £223m a year ago.

Sales climbed to £2.1bn from £968m thanks to strong deliveries of Tesla’s Model S sedans and Model X SUVs, relieving fears that the Model 3 was cannibalising sales of the company’s high-end models.