Tesla is seeking up to $1.15 billion

Tesla Inc. said Wednesday that it plans to raise up to $1.15 billion with stock and convertible debt offerings to help finance the launch of its widely anticipated Model 3 mid-market sedan.

The Palo Alto electric car maker plans to offer $250 million of common stock and $750 million of senior notes convertible into cash and/or stock.

Tesla said that underwriters were granted a 30-day option to buy up an additional 15% of each offering and that Tesla Chief Executive Elon Musk would purchase $25 million of the stock.

The announcement sent Tesla’s existing shares sharply higher in after-hours trading Wednesday. The shares closed during normal trading hours at $255.73, down $2.27, then jumped 2.2% to $261.40.

Tesla said last month that it was on track to start producing the Model 3 in July and to reach volume production by September.

The car, with a starting price of $35,000, is aimed at a wider following of car buyers and is seen as crucial to Tesla’s long-term success. Tesla already builds its mainstay Model S luxury sedan and the Model X sport utility vehicle.

The stock and debt offerings are aimed at offsetting widespread concern that Tesla might face a cash shortage as it not only ramps up the Model 3 but also continues building its Gigafactory battery factory in Nevada and absorbs Solar City Corp., a provider of solar-power panels that Tesla recently acquired.

Tesla said that the notes being offered would be convertible to cash and/or stock at Tesla’s election, and that the interest rate, conversion price and other terms of the notes would be determined later.