Tesla Motors on Sunday said it has finalized $40 million in convertible debt financing, which it will use to accelerate production of its Roadster electric sports car.
The company last week said it was seeking money to overcome a low-cash position of $9 million. Elon Musk, its chairman, CEO, and product architect, also indicated that Tesla had tried, but failed, to raise $100 million.
"Forty million is significantly more than we need, Musk said in a statement. "However, the board, investors, and I felt it was important to have significant cash reserves."
Tesla has shipped about 50 of the $109,000 Roadsters, but there is a waiting list of 1,200 people who have placed deposits.
The latest round of financing will be used to speed up manufacturing of the Roadster, further develop Tesla's powertrain business, and develop future products. The company recently said it will build its headquarters and a plant in San Jose, Calif., to make the Model S, a luxury electric sedan.
The $40 million came mostly from existing investors, which include Musk, VantagePoint Venture Partners, and Draper Fisher Jurvetson. Tesla is said to have raised $145 million in venture capital before the last debt round.
Musk last month replaced its former CEO, and said the company will lay off employees and delay introduction of the Model S for about six months, to 2011.