Tesla sells $2 billion of stock, cancels 12200 Model 3 orders

Even discounting Elon Musk and the standards of all his other creations, the Tesla Model 3 had a lot to live up to. Its electric predecessors like the Model S, Model X, and the Roadster had already set the bar pretty high, and the Model 3 was supposed to be the culmination of everything that came before it, the proving bed of all the futuristic technologies its engineers could dream up of, and the one car with the weight of revolutionizing a stagnant industry on its shoulders. It is meant to be the ultimate geek dream, but at a price point accessible to almost everyone.

And Tesla Motors delivered. Unveiled with a fanfare that can be matched only by Apple’s annual September keynotes, the Model S quickly became a sought-after product even from non-car enthusiasts. When its website opened up preorders, it raked in more than a potential $10 billion in sales within the first 36 hours, that too, for a car that won’t see the light of the day till 2018.

Even a host of tech-savvy Indians jumped into the booking fray, salivating at the chance of getting their hands on the first Tesla model to be sold in the country.

This breathtaking reception to a fully-electric vehicle took even its makers by surprise, who admitted that they did underestimate the demand before preorders began. There simply was no way that Tesla could maintain its existing production plans (which had the battery-making Gigafactory in full swing by 2020) while keeping many of those customers happy.

Which is why Tesla has announced that it's selling a total of $2 billion in stock, about $600 million of it from Elon Musk himself, to pay for its expansion plans. It had to move up its goal of 500,000 electric vehicles per year to 2018 in response to Model 3 deposits, and that means having a "good buffer of cash" (as Musk said during the earnings call earlier this month) to keep things on the fast track.

But that’s not the whole story. In its filings, Tesla Motors stated that it had about 373,000 pre-orders for the Model 3 as of that moment. Tesla said in the filing that about 8,000 customers canceled orders and that it scrapped about 4,200 reservations because they appeared to be duplicates from speculators.

"If we wanted to, we believe that we could further increase the number of Model 3 reservations with minimal effort but believe it is better to guide customers to purchase products currently in production," Tesla said in the filing.

With this much-needed influx of cash, if everything goes as planned now for an innovative company that sadly has a history of missing deadlines, it shouldn’t be long before customers are zooming off to a whole new automotive experience in their Model 3s.