Tesla Motors plans to sell at least US$1.4 billion in stock to help pay for an expansion that includes its Model 3 car and boosting annual production to 500,000 vehicles in 2018.
The net may increase to $1.7 billion if the underwriters’ option to purchase additional shares in this offering is exercised in full. The estimated net proceeds are based on the assumed public offering price of $204.66 per share—the last reported sale price of Tesla common stock on 17 May 2016.
The company said it would use the funds to ramp up production of the Model 3, which CEO Elon Musk has said will begin in late 2017.
The Model 3 represents a significant logistical, financial and technological hurdle for Tesla. But the company said in a public filing Wednesday that it is accelerating its plans to build 500,000 vehicles annually. Previously, it projected it couldn’t sell that number until 2020. Now, it says it plans to hit the target by 2018.
Tesla now holds about 373,000 reservations for the Model 3 electric car due late next year following customer cancellations of about 8,000 cars and 4,200 duplicates canceled by the company.
In the first quarter, the automaker delivered 14,820 cars and plans on selling 80,000 to 90,000 this year.