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Elon Musk posted a message on Sunday to Twitter saying Tesla Motors Inc. and SolarCity Corp., both of which he leads, had no need to tap the equity or debt markets.

Two days earlier, Tesla had said it would raise money before the end of the year.

Tesla is ramping up to manufacture its Model 3 sedan at substantial potential expense. The city of Fremont, Calif., where Tesla maintains a manufacturing plant, last week released a proposal to adjust zoning for the facility, allowing it to double in size and boost its production capacity by an order of magnitude.

At the same time, the car maker has initiated a merger with SolarCity, another move likely to consume substantial quantities of cash. SolarCity in August reported widening quarterly losses and sharply rising operating expenses.

Mr. Musk, who is chairman of both companies, said on Twitter he wanted "to correct expectations" about the companies' need to raise money. He said Tesla, where he is chief executive, would reveal a new product on Oct. 17 and reiterated a Tesla-SolarCity product would be shown on Oct. 28.

Both announcements fit into Mr. Musk's broader effort to make the case for merging Tesla and SolarCity ahead of shareholder votes on the proposal.

Tesla on Friday had updated its filings for the merger with the U.S. Securities and Exchange Commission, restating its plan to seek additional cash by the end of the year.

"While Tesla expects that its current sources of liquidity…will provide it with adequate liquidity based on its current plans through at least the end of the current fiscal year, Tesla is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings," the auto maker said in the filing.

Mr. Musk wrote in a tweet that he aimed "to correct expectations that Tesla/SolarCity will need to raise equity or corp debt in Q4. Won't be necessary for either." In another tweet, he added that the companies "probably" wouldn't need to do so in the first quarter of 2017 either.

Tesla declined a request for further comment.

The move to merge Tesla and SolarCity comes as Mr. Musk is preparing to transform Tesla for the mass market after establishing the company as a maker of high-end electric cars for wealthy customers. Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles.

The expected arrival of Tesla's $35,000 Model 3 sedan next year could be a turning point. Strong early demand for the Model 3 led the company to move its goal of making 500,000 vehicles a year to 2018 from 2020.

Mr. Musk aims to churn out a million cars a year by the end of 2020. "Tesla is going to be hellbent on becoming the best manufacturer on earth," Mr. Musk said in May, when he announced the new target.

He built about 50,000 vehicles last year at Tesla's Fremont factory. That factory could nearly double in size and the facility's production rise to 500,000 vehicles annually, according to a long-term zoning proposal released by the local government last week.

"We are pleased to work with the City of Fremont on a plan that reaffirms our commitment to California and to eventually maximize the potential of our Fremont factory site," Tesla said in a statement. "California continues to be the epicenter of Tesla's manufacturing capabilities and we are proud to be the state's largest manufacturing employer."

Tesla hasn't announced a plan or timeline for expanding the Fremont plant. The proposal to the city, however, suggests Tesla is moving to boost production capacity.

In May, Mr. Musk said production at the Fremont plant could increase to one million vehicles a year. "Whether that's actually wise is a separate question," he told analysts at the time. "For our future product lineup, we're going to need more than one plant in North America just to satisfy North America demand."

He has also said building cars in Fremont alone wouldn't be efficient as the company expands globally, and suggested he would consider opening factories in Europe and China.

The Fremont facility held a special place in automotive history before coming under Tesla's ownership. It was built by then-General Motors Corp., its first vehicle rolling off the assembly line in the 1960s. By the 1980s, however, GM was struggling to compete with Asian imports and partnered with Toyota Motor Corp. to run the factory as a joint venture called New United Motor Manufacturing Inc., or NUMMI. The goal was twofold: GM wanted to learn Toyota's way of production while Toyota wanted experience building in the U.S. The plant closed with GM's bankruptcy in 2009 and Toyota's decision to stop production there the following year. Tesla acquired it a few months later.

Under Tesla's zoning proposal, which would guide development of the property for the next decade or more, the complex's size could increase by about 4.6 million square feet, from 4.5 million square feet, the city said. The expansion could increase production to 500,000 vehicles a year from 50,580 last year and increase the number of employees to 9,315 from 6,210, according to city records.

Tesla has purchased an additional 25 acres next to the property, according to the company.

The Fremont Planning Commission is expected to review the plan on Thursday. The city's staff has recommended that the city council ultimately approve it. The San Francisco Chronicle reported the proposal's details on Friday.

Write to Tim Higgins at tim.higgins@wsj.com

(END) Dow Jones Newswires

October 09, 2016 21:35 ET (01:35 GMT)

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