Tesla has raised roughly $1.2 billion in a quest for capital ahead of the car company’s launch of the increasingly important Model 3 vehicle.
Palo Alto-based Tesla took in $850 million from the issuance of convertible debt and $350 million from the sale of stock, according to a regulatory filing on Friday.
The maker of electric vehicles had signaled in recent weeks that it was eyeing a fresh raise of capital.
During a Feb. 22 conference call with analysts to discuss its fourth-quarter financial results, Tesla executives were asked if the auto maker was seeking more money ahead of the Model 3 launch.
Elon Musk, the company’s chief executive officer, replied in response to a question that without more capital, the manufacturer’s cash flow could become a bit tight.
“This is really a question of what’s the risk tolerance of the company, or how close to the edge do we want to go,” Musk said. “According to our financial plan, no capital needs to be raised for the Model 3, but we get very close to the edge.”
At the time, Tesla was eyeing a number of efforts to address the capital requirements ahead of the Model 3.
“We’re considering a number of options, but I think it probably makes sense to raise capital to reduce risk,” Musk told the analysts. This week, the company said it would do so.
The $850 million component of the capital raise came from the issuance of convertible notes that would be due in 2022. The $350 million came from the sale of roughly 1.34 million shares at $262 each.
Tesla’s shares rose about 1 percent on Friday.
“We intend to use the net proceeds from this convertible notes offering and our concurrent common stock offering to strengthen our balance sheet and further reduce any risks associated with the rapid scaling of our business due to the launch of Model 3, as well as for general corporate purposes,” Tesla stated in the prospectus for the offering.
Photo: Elon Musk at the Tesla factory in Fremont, Calif. on Oct. 1, 2011, when customers who had Model S reservations came to tour the factory and test-drive a beta model. The company is preparing to roll out a new model this year. (Jim Gensheimer/Bay Area News Group)