Palo Alto, California – Tesla Motors has filed to sell as much as $1.7 billion in stock to accelerate its plans to build the Model 3 electric car. Regulatory filings show that Tesla plans to sell at least $1.4 billion in stock, but underwriters can sell an additional $300 million. In addition, company CEO Elon Musk plans to sell about $300 million of his own stock to cover taxes on some of his stock options.
”We intend to use the net proceeds from this offering to accelerate the production ramp of Model 3. We intend to start volume production and deliveries of Model 3 in late 2017 and to accelerate our 500,000 vehicle build plan from 2020 to 2018. We may also use a portion of the net proceeds from this offering for working capital and other general corporate purposes,” company officials say in their filings with the U.S. Securities and Exchange Commission.
Since it began taking orders for the Model 3 earlier this year, Telsa has received about 400,000 orders, though in its filing, the company says a small number of those who reserved cars have asked for their $1,000 deposits back. Even with the acceleration, the vehicle won’t be in production for more than a year.
With a promised starting price of about $35,000, Tesla officials have said the Model 3 will be an affordable electric car, unlike its Model S and Model X which are out of the financial reach of most buyers.
Tesla has been losing money for every car it makes since its founding, and investors had been expecting another capital raise because ramping up production requires huge amounts of cash.
Source: Tesla Motors Inc.