Tesla (TSLA) says it’s currently planning another round of financing for Model 3 and Gigafactory

At the end of last quarter, Tesla had a bigger cash position than ever before with $3.25 billion in principal sources of liquidity – thanks to its recent $1.7 billion stock offering, which was announced to finance the expansion of Tesla’s manufacturing effort for the Model 3 following the increased demand.

Now it looks like Tesla will need more money to finance its ambitious plans. Today, Tesla confirmed that its is currently planning another round of financing.

In a SEC filing today for proposed merger with SolarCity, the company confirmed the news:

“Tesla is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings, subject to market conditions and recognizing that Tesla cannot be certain that additional funds would be available to it on favorable terms or at all.”

The company added that the funds will be “primarily used for tooling, production equipment and construction of the Tesla’s Model 3 production lines, equipment to support cell production at Tesla’s Gigafactory.” As well as for general expansion of its retail and service presence and to support the capital needs of the new company with the merger of SolarCity.

Tesla also highlights another event that prompted the need for capital. After the end of the second quarter, Tesla has received notices of conversion from convertible senior note holders of approximately $422 million. It will need to pay it back in cash by the end of the quarter, which will put a strain on its cash position – hence the new planned capital raise.

The expansion of the Fremont factory for the Model 3 assembly is believed to be the main driver of Tesla’s capital expenditure in the second half of 2016. The automaker expects to spend about $2.25 billion in capital expenditures in 2016 alone.

In a filing earlier this year,  Tesla said that it was working on a $1.3 billion expansion of its Fremont Factory for the Model 3 assembly line. Earlier this month, the automaker also confirmed that “some Model 3 production equipment is already on line, including initial capacity in stamping and paint centers”. Tesla added that it also plans the start construction for a “new Model 3 body and general assembly centers” by the end of the year.