Shares of electric vehicle manufacturer Rivian fell sharply on Tuesday following the announcement of a substantial stock offering. The company revealed plans to issue 75 million shares of common stock, a move expected to raise approximately $1.5 billion based on Monday’s closing share price.

Rivian stated that the funds raised from the share sale would be allocated to general corporate purposes. This includes meeting equity requirements tied to a Department of Energy loan aimed at supporting the construction of a new electric vehicle manufacturing plant in Georgia.

The announcement came shortly after Rivian projected second-quarter revenue exceeding analysts’ expectations. A company representative noted that the positive market response to Rivian’s production and delivery numbers for the quarter, combined with a favorable overall market environment, made it an opportune moment to secure additional capital.

Despite the upbeat financial outlook, investors reacted negatively to the news, driving the stock price down by 18%. The decline reflects concerns over dilution from the share sale and uncertainty about the company’s long-term financing needs amid its ongoing expansion efforts.

Rivian’s efforts to scale production and fulfill demand for its electric vehicles have been closely watched by investors and industry analysts as the company seeks to establish itself in the competitive EV market. The new manufacturing facility in Georgia is a critical component of Rivian’s growth strategy, intended to increase output capacity and meet rising consumer interest.