Tesla will ask investors for another $1.15 billion as it scales up manufacturing of the Model 3

An affordable car is expensive to make.
An affordable car is expensive to make.
Image: Tesla
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Tesla CEO Elon Musk has hinted that the company would raise more money to scale up manufacturing for its first mass-market vehicle, the Model 3, due out in mid-2018. Now we know how much.

Tesla told investors on March 15 it will offer $250 million in common stock and $750 million in senior debt as it ramps up production on the electric vehicle, which the company sees as essential to its future. Musk will buy $25 million of common stock, the company said. Including options granted to the underwriters, Tesla expects to raise a total of $1.15 billion.

Tesla is committed to manufacturing 500,000 vehicles per year by 2018, a six-fold increase over last year’s factory volume of about 84,000 cars. During his last investor call on Feb. 14, Musk maintained costs were within projections, but suggested more cash on the company’s balance sheet would protect against cost overruns. Tesla’s previous Model X SUV and Model S sedan missed early delivery forecasts, although the company has since proved more consistent in delivering vehicles in 2016.

The loss-making company has raised about $6 billion in multiple rounds since its initial public offering in June 2010. Tesla lost about $666 million dollars on revenue of about $7 billion in 2016.