The car business is an enormously expensive place to play. Building factories can cost anywhere from hundreds of millions to billions of dollars, especially if you want to mass produce anything. In late 2008 and early 2009 at the height of the financial crash, we saw General Motors go from $16 billion in cash reserves to virtually nothing in a matter of months as they raced toward bankruptcy. Tesla Motors is now standing on the precipice of major investments to grow the company and they have been spending their reserves at such a prodigious rate that they too need to raise more cash.

In the recently released Q2 2015 earnings report, a more troubling aspect than the operating losses which have been typical of the company’s finances from day one, was the cash burn rate. Tesla went from having $1.905 billion on December 31, 2014 to just $1.15 billion on June 30. A good chunk of this went to paying for equipment in the Fremont, California factory for production of the Model X crossover and ongoing construction of the “Gigafactory” battery plant near Reno, Nevada.

However, the outflow is just getting started as the company prepares to start equipping that $5 billion battery factory (although a significant chunk is coming from Panasonic and other suppliers) as well as developing and producing the more affordable Model III. Tesla has publicly stated a goal of expanding production from 50,000 units this year to 500,000 by 2020. While selling half a million cars would raise significant revenue, they have to spend a lot of money before they ever get there.

To help keep things going in the near term, Tesla announced plans today to issue $500 million worth of new common shares in the company. CEO Elon Musk has committed to spending $20 million of his own money to buy new shares. Given the enormous investments that will be required for equipment and engineering in the next five years, $500 million seems like a pittance and it likely won’t be the last time we see Tesla going to either the equity or debt markets to raise more money. In this case, Tesla’s stock price has already taken a hit in the last few weeks dropping from a high of $282 on July 20 to close at just over $238 yesterday. Right now they are probably balancing the need for cash with not overly diluting the stock and sending the price down even faster.

These are perilous times for Tesla Motors.