Tesla Motors said it will sell about $1.7bn of common stock to fund the production of the newly announced Model 3 car, which is scheduled to hit the market in late 2017.
The Model 3 achieves 215 miles of range per charge while starting at just $35,000 before incentives.
Tesla already has about 373,000 pre-orders for the Model 3 car, which will have both rear-wheel drive and all-wheel drive similar to that of the Model S vehicle.
The model has a seating capacity for five adults and will have front and rear trunks for storage.
It will feature a 15-inch landscape touchscreen inside compared to the 17-inch portrait touchscreen in the Model S and X.
In a regulatory filing, Tesla said the reservation total for Model 3 is a net number after customer cancelations of around 8,000 and nearly 4,200 reservations that the company canceled due to duplicate indications.
Apart from this, Tesla also has plans to increase production numbers at its plant up to 500,000 per year by 2018, a plan which was earlier decided to be executed in 2020.
In the prospectus, Tesla Motors gave a statement that, "We have a history of losses and have to deliver significant cost reductions to achieve sustained, long-term profitability and long-term commercial success."
The electric car manufacturing company said that as of March 2016, it had an accumulated deficit of $2.6bn and even with increasing production and sales of Tesla cars and Tesla energy products, it is not confident of reporting profits.
In order to achieve any commercial success, the company says that it needs to go ahead with its path of planned cost reductions and control over operational costs while producing quality products.
