Tesla will need a big pot of new capital to get the Model 3 production line up and running. The company opted to raise a few bucks in a new equity offering, which turned out to be a big success.

The underwriters, led by Morgan Stanley and Goldman Sachs, exercised their options to buy as many shares as possible, and Tesla brought home the maximum $1.7 billion in cash. Adding this to the $373 million that Tesla has taken in from Model 3 reservations, the company now expects to have plenty of cash to cover its projected expenses through 2016.

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Tesla issued 7.9 million new shares in the secondary offering, and Elon Musk issued 5.5 million shares as he exercised some personal stock options (he also donated 1.2 million shares to charity).

When a company issues new stock, it reduces the amount of equity owned by existing investors – this is known as dilution.  The 13.4 million new Tesla shares will result in about 10% dilution, which most stock analysts seem to think is well worth it. In any case, the stock market approves – TSLA shares crept steadily higher as the stock offering process unfolded.

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Sources: Tesla SEC Filing, TechCrunch, Motley Fool