Tesla is looking to raise up to $1.15 billion in funding ahead of producing its first mass market vehicle, the Model 3. The company will sell $250 million in stock as a secondary offering, along with $750 million in debt.
Tesla CEO Elon Musk is participating in the round and will buy $25 million in shares of common stock, the company said. The company is raising the round in the midst of prepping for production of the Model 3 and after the luxury vehicle manufacturer announced that it planned to build at least two more of its battery and vehicle factories.
In October, Musk tweeted that the company “probably” would not have to raise funding in the first quarter of 2017. However, when asked about raising another round during the fourth quarter earnings call, Musk said bringing in more funding would help reduce financial risk for shareholders.*
“According to our financial plan, no capital needs to be raised for the Model 3, but we get very close to the edge,” Musk said. “So, then that's probably not the best thing for shareholders on a risk adjusted basis. So, we're considering a number of options, but I think it probably makes sense to raise capital to reduce risk.”
The announcement also comes on the same day that President Donald Trump met with representatives from some of the Detroit automakers to discuss loosening environmental standards.
While this new round may not be directly tied to President Trump’s comments, if Trump were to do away with the $7,500 electric vehicle subsidy, Tesla’s business could see some damage. That said, the company has managed to cultivate demand around its brand and saw increasing orders for its luxury vehicles in the last quarter of 2016.
Update: This article was updated to include Musk’s recent remarks regarding raising capital.
This article originally appeared on Recode.net.