Tesla Motors filed its 10-Q just hours before the deadline earlier this week, and a large chunk of that filing focused on the risks the automaker is facing, especially with the Model 3. Media reports have indicated that preorders for the mass market electric car have surpassed 400,000, and then Tesla wowed and frightened Wall Street at the same time by announcing that it bumped up plans to produce 500,0000 vehicles annually by two years to 2018.

Amid Slow Progress At Gigafactory, Tesla Will Need To Raise More Cash

Tesla making slow progress on the Gigafactory

In order to fund this accelerated production ramp, the automaker will need to raise funds in addition to all that cash it is taking in from the $1,000 deposits for all those Model 3 preorders. Barclays analysts predict that the next round of fundraising will be a down round and that Tesla actually deserves a down round because of all the risks associated with its quest to become a mass market automaker.

Barclays analyst Brian Johnson, who has an Underweight rating and $165 per share price target on Tesla, noted that so far the company has spent very little on the Gigafactory, which is needed to make the batteries for the Model 3. Analysts have been debating about whether the automaker can get battery costs where they need to be to turn a profit on the car, even with the Gigafactory online.

The company only spent about $52 million on the facility in the first quarter, bringing the total to $361 million. It plans to spend another $470 million this year, which means $1.2 billion will be spent in future years. Needless to say, Tesla may have to speed up the construction timeline for the Gigafactory in order to be able to meet its accelerated timeline for mass market production.

Tesla reveals new risk factors for the Model 3

Johnson also notes that the biggest addition to Tesla’s 10-Q was the risk factors section, especially the part about the Model 3. He emphasized that the automaker highlighted its lack of experience in mass market manufacturing and that it hasn’t yet finalized the design of the Model 3. Tesla also said it is in the process of evaluating and selecting suppliers for the car’s components.

The Gigafactory is specifically mentioned in the new risks section as well, as Johnson notes that management warned investors about the risks associated with bringing the Gigafactory online soon enough to meet the timeline for the Model 3 production. The automaker also warned that the targeted gross margins for the Model 3 could be at risk if the facility doesn’t cut battery costs down to where they need to be.

Tesla shares edged higher by 0.21% to $207.71 during regular trading hours on Friday.