The Tesla Model 3 is very popular among consumers. The company already received over 400,000 reservations for the EV, which starts at $35,000. In order to get the car into production, Tesla needs money. A lot of money. That’s why it recently announced it plans to raise $1 billion that will help it keep up with the demand for the upcoming electric vehicle.
Tesla will raise $250 million with a secondary stock offering and $750 million with convertible senior notes. These will be converted into cash or shares of Tesla’s common stock in 2022. Interest rates and other terms of the notes have not been determined at this point. As part of the deal, Elon Musk will purchase $25 million of common stock.
The Model 3 was announced back in March 2016 and is expected to hit the market soon. The company said that production will kick off in July, while volume production is scheduled to start in September. First deliveries will begin by the end of the year if everything goes according to plan.
At least for now, it looks like Tesla is on track to deliver on its promise. Securing additional financing means that the company is thinking ahead and making sure it will be able to fill not only the 400,000 orders it already has but also the ones it will receive in the near future. Based on just its price, looks, and range, we expect that Tesla will sell a lot more Model 3 EVs across the globe.