A Tesla Model S vehicle is displayed at the Tesla store in Sydney, March 13, 2017. REUTERS/Jason Reed

Tesla Inc. announced Wednesday it was going to the market to raise about $1.15 billion in fresh capital, ahead of the company’s upcoming launch of the Model 3, its “mass-market” sedan expected to hit the roads in the second half of 2017. The money will “strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes,” the company said in a statement.

CEO Elon Musk will invest $25 million in the $250 million worth of common stock being put on offer. Another $750 million is expected to come from convertible senior notes, due in 2022. The remaining $150 million is expected to come from the offering’s underwriters, who have been granted the option to purchase a maximum of an additional 15 percent of each of the two offerings, according to the Tesla statement.

Read: Will Tesla Be Able To Ramp Up Gigafactory Production Quickly?

At the end of 2016, the company had cash and cash equivalents of $3.39 billion but it is burning money fast in capital expenditure as it looks to set up more Gigafactory operations, ramp up production of its existing Model S and Model X vehicles, as well as start and rapidly increase manufacturing of the highly anticipated Model 3. In the first half of 2017 alone, Tesla expects to spend between $2 billion and $2.5 billion, according to guidance it issued at the end of 2016. Which explains why the Silicon Valley-based company needs to raise fresh capital.

Tesla shares closed 0.88 percent lower during Wednesday trade on Nasdaq, but were up sharply by 2.07 percent during after hours.