Tesla has raised $1.2 billion in new cash from sale of common shares, and convertible notes that come due in 2022. The total amount includes $350 million in share sales, plus $850 million raised via the senior notes, which is a bit north of what it announced on Wednesday it was planning to raise.
The capital raise comes after Tesla CEO Elon Musk said on an earnings call that while it could’ve finished the process of ramping up for Model 3 production later this year with the funds it had on had, doing so would put it near “the edge” in terms of on-hand cash. The automaker has opted to seek more funding to help offset potential risks to shareholders associated with entering into production of the Model 3, which has already seen much stronger demand in pre-sales than the Model S or X thanks to its affordable sub-$35,000 (before federal tax credit) price point.
The raise also includes a personal purchase of $25 million in common shares by Elon Musk, who is already the top shareholder at Tesla with around 21 percent ownership in the company.