Tesla has impressed the world with the Model 3 but now it must come to grips with the herculean task of actually making the hundreds of thousands of units that have already been reserved. The company recently hired an ex-Audi production boss to further streamline its process and now it’s looking for a massive cash injection to fund the Model 3 production. Tesla has announced that it’s going to sell $2 billion in stock for this purpose.
Tesla confirmed in a regulatory filing that it’s going to sell 6.8 million shares of the company in a secondary stock offering. $TSLA is currently trading at over $200 a share which means that it’s looking at $1.4 billion. Co-founder and CEO Elon Musk will also be selling close to 2.8 million shares and that amounts to around $600 million, hence the $2 billion figure.
Much of this cash is going to be used for increasing its production capacity. Tesla continues to have bottlenecks in production and now that it has launched a mass-market affordable electric car, it certainly needs to be able to manufacture them in greater numbers.
The company recently announced that it has set an ambitious goal to produce 500,000 cars annually by the year 2018. It was originally expected to hit half a million units by 2020 but it’s looking to pick up the pace, and $2 billion will certainly come in handy for that.