Tesla Motors, Inc. said Wednesday it plans to offer 250 million U.S. dollars worth of common stock and 750 million dollars in convertible notes due in 2022, to help finance its production of upcoming Model 3 electric car.
Elon Musk, chief executive officer of the automaker headquartered in Palo Alto, Northern California, will purchase 25 million U.S. dollars of common stock.
In announcing the move, Tesla acknowledged in a press release that the offerings totalling more than 1 billion U.S. dollars are intended to "strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3."
Unveiled about a year ago and priced at 35,000 dollars, about half the price of Tesla's Model S, the Model 3 is scheduled for delivery by the end of 2017.
Weeks ago, in a letter to shareholders, the electric automaker said it planned to spend 2 billion to 2.5 billion U.S. dollars before the planned start of Model 3 production in July. It currently produces the luxuary Model S and SUV Model X.