Tesla will need some additional cash to build its Model 3.
Tesla Motors will turn to investors to raise at least $1.15 billion in order to fund the initial production of the company's upcoming Model 3 sedan.
Tesla confirmed last week that it will raise the funds through the sale of new stock and convertible securities. Tesla will raise about $250 million through the stock sale and $750 million in convertible debt, according to The Detroit News.
That $1.15 billion target is significantly less than what some analysts believe Tesla will need to bring the Model 3 to market. Previous reports have suggested that Tesla will need at least $1.5 billion to begin building the Model 3, with some estimates ranging as high as $3 billion.
Those estimates are based on Tesla's current cash burn. In the fourth quarter of last year Tesla blew through $970 million. The California-based automaker could spend another $2.5 billion during the first half of 2017. At the end of the fourth quarter Tesla had $3.4 billion in cash on hand.
Tesla CEO Elon Musk says the company could actually bring the Model 3 to market without any extra cash, but admits that would put the company "very close to the edge" in terms of finial standing.
Tesla is scheduled to begin production of the Model 3, which will retail from about $35,000, in July.