Tesla is looking to raise additional funding to the tune of up to $1.15 billion, as the company prepares for the arrival of its mass-market electric vehicle, the Model 3.

Formerly Tesla Motors before changing its name to reflect its transition into a clean energy company, Tesla is once again turning to investors for fresh capital.

Tesla Looks To Raise Up To $1.15 Billion

According to Tesla's announcement, the company is offering $250 million of common stock and $750 million aggregate principal amount of convertible senior notes due 2022, in simultaneous underwritten public offerings for a total of $1 billion.

Tesla has also granted a 30-day option to underwriters to allow the purchase of up to an additional 15 percent on top of each offering, which increases the maximum amount that the company could raise to $1.15 billion.

Tesla CEO and founder Elon Musk will be participating in the offering by purchasing $25 million of the common stock offered.

Tesla has been expected to raise capital since late last year, a move that gained traction when Musk last month said that the company is "close to the edge" on its needs for cash. Some analysts even predicted that Tesla would be looking to raise funds of as much as $2.5 billion.

Tesla Gears Up For Model 3 Production

Tesla claims that the net proceeds of the offerings will be used to strengthen the company's balance sheet and reduce further risks that may be associated with the expected rapid expansion of its business upon the launch of the Model 3.

By the end of 2016, Tesla held $3.39 billion in cash and cash equivalents, but most are from a stock offering in May of last year, cash acquired from its acquisition of SolarCity, and almost $1 billion that the company draws from credit facilities.

Tesla believes that it will spend between $2 billion and $2.5 billion over the first half of the year on capital expenses, necessitating a fresh capital raising to give the company a bit more cushion as Model 3 mass production is set to start in July.

The announcement of the production launch for the Model 3 in July was made through a shareholder letter covering the company's results for the fourth quarter and the full year of 2016. Tesla also noted that it is planning to finalize the locations where three more Gigafactories will be built in addition to the one in New York, where Tesla is partnering with Panasonic for solar cells and modules, and the other one in Nevada.

However, with July just a few months away, it was reported that Tesla has not yet finalized the design of the Model 3, raising concerns that the company will not be able to meet its production launch target. If this happens, though, it will not be the first time that Musk will not keep a promise, especially in terms of production and shipping schedules.

A leaked image of a Model 3 prototype, however, gives hope that Tesla will not break this particular promise, with the vehicle in the image looking like it is in the final phases of its design process.

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