By Bloomberg
May 17, 2018

Elon Musk may need to tap capital markets for more than $10 billion by 2020 to fund Tesla’s automaking operations, new products and an expected expansion into China, according to Goldman Sachs Group.

While Tesla (tsla) has access to new bonds, convertible notes or equity to fund its growth, each of those choices has downsides for investors, Goldman analyst David Tamberrino said in a research note Thursday.

“We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets,” Tamberrino wrote. “However, issuing incremental debt (including priming current creditors with secured debt) may weigh on the credit profile of the company while issuing additional equity or convertibles at lower premiums would dilute current shareholders.”

Musk, who co-founded the electric-car maker and serves as chairman and chief executive officer, is furiously cutting costs to avoid raising capital this year, even cutting off analysts who asked probing questions on a conference call this month. The company is struggling to meet production targets on its first mass-produced vehicle, the Model 3, and burned through more than $1 billion in the first quarter.

The company set up a unit in China this month, taking a step closer to producing electric vehicles in the country and setting up its first gigafactory outside the U.S.

The shares, down 8% this year, closed Wednesday at $286.48, giving the Palo Alto, California-based company a market value of $48.6 billion. Tesla had about $2.7 billion in cash at the end of the first quarter.

Tamberrino recommends selling Tesla shares, and sees them slumping 32% to $195 over the next six months.

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