Electric car maker Tesla sets stock offering price at $242 per share

Tesla Motors is pricing an upcoming offering of its stock at $242 per share, or slightly below the most recent closing price for the electric car maker.

Shares of the company are climbing in early morning trading after it detailed in a regulatory filing an offering it expects to generate about $642 million in proceeds after expenses.

Tesla Motors Inc. will offer nearly 2.7 million shares or more than 3 million if underwriters exercise their option to buy more shares. CEO Elon Musk plans to buy $20 million worth of stock.

The Palo Alto, California, automaker says it needs the cash in part to help with development of its Model 3, a lower-cost electric car due out in 2017.

Shares of Tesla are up $1.99 to $244.50 in premarket trading.