Tesla said on Tuesday that it plans to issue additional shares and expects to receive up to $5 billion in capital. Tesla fell from up to down 2.55 percent in pre-market trading hours on the news.
Tesla has entered into agreements with several banks for the sale of its common stock.
According to Tesla's SEC filing, the banks include Goldman Sachs, Citi, Barclays Capital, BNP Paribas Securities, Banc of America Securities, Credit Suisse Securities, Deutsche Bank Securities, Morgan Stanley, SG Americas Securities LLC and Wells Fargo Securities.
So far this year, Tesla has completed two additional share offerings in February and September, respectively.
In February, Tesla announced the issuance of 2.65 million to 3.1 million new shares to raise more than $2 billion. In conjunction with the completion of the new issue, the underwriters subscribed for an additional 397,500 shares.
The net proceeds from the February stock offering were $2.31 billion. Tesla previously said the funds would be used to "strengthen its balance sheet" and for "general corporate purposes.
On September 1, 2012, Tesla announced that it had signed an equity distribution agreement with Goldman Sachs, Barclays, Deutsche Bank, Morgan Stanley, and other underwriters, who will become Tesla's sales agents.
Under the agreement, Tesla may issue common stock at market prices from time to time for an aggregate offering size of up to $5 billion. Tesla said it plans to use the net proceeds from the offering to further strengthen its balance sheet, as well as for general corporate purposes.
Tesla is the latest electric car company to announce a share issuance following this year's surge in its stock price.
Tesla's Chinese rival Xpeng Motors (NYSE: XPEV) announced on Monday that it plans to issue an additional 40 million ADSs, with an over-allotment option of 6 million ADSs to the underwriters. Following the announcement, Xpeng fell more than 10% in pre-market trading on Monday.
Each ADS represents two shares of Class A common stock, with a maximum price of $25.33 per additional Class A share, which is calculated as a maximum price per ADS of $50.66. The aggregate amount of the financing is expected to be up to $1.942 billion, after expenses, and $2.23 billion if the over-allotment option is fully exercised.
On December 2, Li Auto filed an F-1 with the US Securities and Exchange Commission (SEC) for the issuance of 47 million additional ADSs for net proceeds of approximately $1.62 billion.
Approximately 70% of the funds raised by Li Auto will be used for technology development, including: approximately 30% for the research and development of new-generation electric vehicle technologies, including high-voltage platforms, high-charge/discharge rate batteries and ultra-fast charging; approximately 20% for the development of the next BEV platform and future models; and approximately 20% for the development of automated driving technologies and solutions.
