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Hidden by Model 3 mess, Tesla's debt problem is about to emerge

The SolarCity debt is mostly non-recourse, meaning Tesla doesn't guarantee repayment; SolarCity does. That's backed by cash flow and assets. It's still included in Tesla's overall debt, though, which is used to determine credit ratings and affects borrowing costs. Of Tesla's $10 billion of total debt outstanding, about $3 billion is non-recourse, most of which comes from SolarCity.

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