Tesla announced on Wednesday in a regulatory filing with the U.S. Securities and Exchange commission that it plans on raising additional capital through either an equity or debt offering by year-end. The cash raise will help support the company’s ambitious Model 3 and Gigafactory production schedule.
As we reported on last week, Tesla’s capital spend will soar by 340% in the second half of this year while it stays the course with investments into new development and growth. Though Tesla has built a $3.25 billion cash position helped by the company’s raise of $1.7 billion earlier in the year, additional cash will be needed to help fund tooling and equipment costs for its highly anticipated mass market Model 3. Early success by way of the nearly 400k reservation deposits received on its Model 3 has prompted the company to accelerate its original target of producing 500k vehicles per year from 2020 to 2018.
Additional capital from the cash raise will go towards development of the company’s Gigafactory battery facility and for the expansion of its retail operation.
Tesla also expects to issue 15 million shares to pay out SolarCity shareholders, if approved, as part of the merger. The company filing will value SolarCity shares at $24.16 resulting in a deal worth approximately $2.4 billion.
Both Tesla (TSLA) and SolarCity (SCTY) shares were trading down by 29 cents (-.14%) and 2 cents (-.10%), respectively.