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To fund the production of its much-awaited affordable electric vehicle Model 3, Tesla plans to raise around $1.15 billion through a sale of common stock and convertible senior notes. This investment falls in line with CEO Elon Musk’s previous comments, where he said that the automaker might infuse fresh capital to reduce financial risk for shareholders.

According to an official blog post, Tesla will sell $250 million worth of common stock coupled with $750 million in the form of debt through convertible senior notes in the current public offering. The automaker is also giving underwriters the option to purchase an additional 15 percent of each offering in the coming 30 days. The latter will be converted to cash or shares of Tesla stock in 2022, the exact terms of the transaction haven’t been decided as of yet.

In addition, Musk is also participating in this public offering by personally picking up $25 million of common stock. This isn’t the first time Tesla has made such a public offering. The automaker has decided to fund its electric vehicle production with the sale of common stock back in 2016 and 2015 as well. There were no convertible senior notes back then (meaning Tesla didn’t add any loans) and Musk participated in both rounds by purchasing more common stock.

The electric automaker further adds that the total raise would be around $1.15 billion only when the underwriters exercise the options provided to them. And as for how the proceeds would be utilized, the blog post says,

Tesla intends to use the net proceeds from the offerings to strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes.

This development comes when Tesla has already started making alterations to their factories in Fremont and Nevada to make them ready for Model 3 production. The company has witnessed its share prices tumble due to fears of delay in production, but the latest capital infusion will probably help Tesla deliver on its promise by late of this year.

For those unaware, Tesla Model 3 is the company’s very first affordable electric vehicle launch. It claims to have a range of around 215 miles and can go from 0-60 mph in under 6 seconds. Also, the company has announced some nitty-gritty’s on the said electric vehicle, where it may include a solar roof variant and no 100 kWh battery pack option due to a smaller wheelbase.

The affordable $35,000 sedan is expected to start shipping in limited numbers this July, with a steady increase in production. It plans to produce about 5,000 vehicles per week this year and then increases it to 10,000 vehicles per week in 2018. Telsa Model 3 will most likely be launched globally, along with an India launch expected this Summer. It is currently testing prototypes that have been spotted rolling in the streets of California.

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