Tesla CEO Elon Musk will also sell nearly $600 million of stock to cover tax obligations as automaker moves forward with ambitious production goal
PALO ALTO, Calif.—Working to drastically increase its manufacturing capacity as it pursues an ambitious production target for its new mass-market electric vehicle, Tesla Motors Inc. has announced plans to sell at least US$1.4 billion in stock.
The Palo Alto, Calif.-based automaker will offer more than 6.5 million shares at $215, while Tesla CEO Elon Musk will sell nearly $600 million worth of stock to satisfy tax obligations.
The electric vehicle maker will not receive any proceeds from Musk’s sale, but said it expects to raise as much as $1.7 billion on its own offering if the underwriters exercise their purchase options in full.
With its sights set on building half a million vehicles by 2018, the company said the stock sale will go toward financing its production ramp up, while a portion of the proceeds may also contribute to its working capital and other general corporate expenses.
Tesla plans to start shipping its new Model 3 in late 2017. The hotly-anticipated mass-market electric was announced earlier this year and has racked up more than 300,000 pre-orders.
The company’s status as a niche automaker, as well as its history of missing production milestones in the past, however, have made some analysts skeptical about the viability of Tesla’s ramp up schedule for the Model 3.