Tesla is about to go on another building spree.
The automaker and energy company said in its quarterly shareholder letter that it will finalize locations for as many as three more gigafactories—Tesla’s own term that aims to discourage any attempts to compare these to the typical manufacturing facility.
Tesla already has two gigafactories. The first one, dubbed Gigafactory 1, is located outside of Reno, Nevada on about 3,200 acres in a massive industrial center. Tesla expects the factory, which will have more than 10 million square feet of operational space, to be the biggest building in the world once it’s complete. The current structure of the factory has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors. As of January 2017, about 30% of the factory is complete.
In January, Tesla began production at Gigafactory 1 of battery cells for energy storage products, which have the same form-factor as the cells that will be used in Model 3. The $5 billion factory will also make electric motors for the Model 3.
Tesla’s Gigafactory 2 is the solar plant in New York.
“Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5,” the company said in the shareholder letter.
The impending Model 3—Tesla’s mass market electric vehicle—dominated much of the earnings call as analysts tried to gauge whether the company would be able to meet its production goal and what kind of strain on capital it could have on its balance sheet.
Preparing to produce the Model 3 is expected to cost billions. The company said in its letter that it expects “to invest between $2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production.” Tesla CFO Jason Wheeler later clarified that this capital expenditure is an estimate for the first half of the year, not a full-year estimate.
Add three gigafactories to the list and the implications for a capital raise goes from possible to inevitable. CEO Elon Musk even suggested as much during Wednesday’s call.
Read More: Tesla’s Former CFO Is Coming Back for Round Two
When asked about whether the run up to the Model 3 would lead to a capital raise, Musk noted that raising capital could reduce risk for shareholders.
“So this is really a question of what’s the risk tolerance of the company, or how close to the edge do we want to go? Musk said during the earnings call. “According to our financial plan, capital needs to be raised for the Model 3, but we get very close to the edge. So, then that’s probably not the best thing for shareholders on a risk-adjusted basis. So, we’re considering a number of options, but I think it probably makes sense to raise capital to reduce risk.”