Electric carmaker Tesla has revealed plans to raise $1.5bn (£1.15bn) in its bid to fund incremental production of its new Model 3 car.

In a statement on Monday (7 August), the US carmaker said it will raise the funds via the selling of bonds to institutional investors.

Tesla currently has 518,000 orders for Model 3 which would carry a marked price of $35,000 per unit. Initial production of the new model started in July.

At the time, the company's chief executive officer Elon Musk said Tesla has set a target of 400,000 units to be assembled by 2018.

"Model 3 would lead to six months of manufacturing hell," Musk said at the time, with his company attempting to make 100,000 units in 2017 at its California factory.

Tesla does have cash holdings of $3bn, but the project is thought to be placing a strain on its finances. By some industry estimates, the carmaker could burn as much as $2bn of its cash reserves this year alone.

The company has yet to make a profit in its history.

A spokesperson for Tesla said its bonds will have to be repaid to investors in eight years, but the interest rate on offer has not yet been agreed upon.