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Tesla Motors to raise over $1 billion ahead of Model 3 release

Photo by Smith Collection/Gado/Getty Images(NEW YORK) -- Tesla Motors is planning to offer more than $1 billion in stock and securities in an effort to secure its financials before bringing its Model 3 vehicle to market.

The company announced offerings of $250 million in common stock and $750 million in convertible senior notes. The company is expected to begin production on its Model 3 later this year and be more affordable than Tesla's previous vehicles.

notes that Tesla warned Wall Street that it was "close to the edge" late last year after spending nearly $1 billion in the fiscal fourth quarter.

On Wednesday evening, Tesla was at $262.14 per share -- up 2.5 percent.

Tesla CEO Elon Musk said on a Feb. 22 conference call that while raising funds wasn't critical to the release of the Model 3, it was a good idea.

The Model 3 is expected to retail for under $40,000, and the company hopes to produce 500,000 vehicles by 2018 and one million by 2020. In 2016, Tesla produced nearly 84,000 vehicles.

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