Tesla plans to raise $1.5 billion for Model 3 production

Tesla Inc stated on Monday it plans to raise about $1.5 billion in a bond offering as the automaker looks to increase production of its newest electric sedan, the Model 3.

The debt offering comes as the automaker gets thousands of advance bookings for the Model 3, which were balancing at about 1,800 daily due to the vehicle’s launch in late July.

Elon Musk-led Tesla is relying on the Model 3, its least pricey automobile, to become a lucrative, mass market electric vehicle maker.

At the launch event, Musk stated the company would deal with “at least 6 months of producing hell” as it boosts production of the Model 3, which has a $35,000 base rate.

Tesla had more than $3 billion in cash on hand at the end of the June quarter, compared to $4 billion at the end of the last quarter and $3.25 billion a year previously.

Tesla’s money burn, anticipated to top $2 billion this year, has prompted short-sellers like Greenlight Capital’s David Einhorn to bet versus the Palo Alto, California company.

Shares of Tesla, which have increased 67 percent in 2017, were up 0.5 percent at $358.50 in premarket trading.