Tesla to Sell $500 Million of Stock

Tesla Motors Inc. said Thursday that it plans to sell $500 million in stock to fund its hefty spending on projects like the Model 3 vehicle and its Nevada battery factory.

The offering will be the electric-car maker's first sale of shares since May 2013.

Shares of Tesla, up 7.1% this year, gained 2.1% to $243.13 a share in premarket trading.

Tesla has been plowing money into growth initiatives, including its Model X SUV due later this quarter and the Nevada battery factory slated to open in 2016. It has long-term ambitions to enter the lower-end of the electric-vehicle market, and will unveil a preview of its cheaper Model 3 in 2016 with plans to launch it a year later.

Earlier this month, Tesla reported a second-quarter loss that nearly tripled from a year earlier amid the hefty spending.

Tesla said Thursday that it will use the proceeds from the offering for a variety of purposes, including growth of its stores, service centers and energy business.

Tesla said Chief Executive Elon Musk intends to buy $20 million in shares through the offering, adding to his existing $6.74 billion stake, according to FactSet.

Tesla said it will give underwriters the option to buy $75 million in shares. Goldman Sachs & Co. and Morgan Stanley are book-running managers for the offering.

Write to Chelsey Dulaney at [e-mail]

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