The speculations were fueled by a statement by Musk past year in which he said that the company was "close to the edge" on its requirement for cash.
The company announced Wednesday that it would be selling new stock and convertible securities in preparation for the debut of the new sedan, and that numbers would total more than $1 billion.
The press release continues: "The aggregate gross proceeds of the offerings, including the options granted to the underwriters, is expected to be approximately $1.15 billion".
Palo Alto-based Tesla took in $850 million from the issuance of convertible debt and $350 million from the sale of stock, according to a regulatory filing on Friday.
Tesla shares opened at $264 Friday morning before dropping 0.7% and then rebounding.
Tokyo stocks edge lower as yen rises after Fed meeting
With strong economic reports in recent weeks, expectations that the Fed may stand pat this month have changed. Australia's S&P/ASX 200 added 0.2 percent to 5,799.60 and India's Sensex was up 0.3 percent at 29,683.29.
Meanwhile, Tesla's chief financial officer, Jason Wheeler, will leave the company in April to take a job in the public sector after a year with Tesla. With that into consideration, the additional funding of up to $1.15 billion will definitely provide the company with an extra safety net as the mass production of the Model 3 begins this July.
The 1.3 million shares sold represents about 0.8 percent of Tesla's outstanding shares as of December 31.
Tesla also hasn't provided an update on the number of reservations taken for the Model 3, which is believed have sold out for the first year; advance reservations totaled 373,000. "In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties or their affiliates expect to enter into various derivative transactions with respect to Tesla's common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes".
The automaker is planning to raise more than $1 billion in capital to help bring the vehicle to market.