What happened

CEO Elon Musk has big expansion plans for Tesla (TSLA 0.51%), and that means big spending up ahead. Investors are cautious, sending Tesla shares down nearly 4% on Friday morning.

So what

Tesla's annual meeting was held Thursday night, and the big item going in was a planned 3-for-1 stock split. Shareholders approved the split, which Tesla said would make the electric vehicle stock more accessible to employees and individual investors.

Musk is known for his bold growth targets, and this meeting was no exception. Musk wants Tesla selling 20 million vehicles annually by 2030, up from 936,222 last year. With Tesla aiming to produce 1.5 million to 2 million vehicles per year at each factory, that means Tesla will need upward of a dozen assembly plants by the end of the decade to meet those goals.

Tesla currently has four plants, with its original operation in California and its facility in China carrying the load for now. In June Musk described the two newest plants, in Texas and Germany, as "gigantic money incinerators."

If Tesla is to reach Musk's 2030 production goals, it will require massive capital spending. The German plant is said to have cost between $5 billion and $7 billion to construct. Musk also must figure out how to do future construction more efficiently, so it does not become the same cash drain he has described with the current plants.

Now what

Tesla ended the quarter with more than $18 billion in cash, but automobile manufacturing is capital intensive and requires automakers to keep billions in reserve at any time. If Tesla is going to build new factories, it is going to have to raise more cash.

At least some of that is likely to come from debt financing, but it does seem inevitable that at some point Tesla will tap equity markets again to fund its expansion plans. Secondary offerings, unlike stock splits, do impact the total ownership stake of a current investor and could be a reason for the stock's negative reaction to the meeting.

Not that this will come as a surprise, but it also likely means there is no chance Tesla pays a dividend anytime soon. Old-economy automakers have historically been income-focused investments, and although most companies in the sector stopped paying dividends during the pandemic Ford Motor Company has restarted its program and General Motors is likely to follow at some point.

If there was any doubt before, Tesla has reconfirmed it is focused on growth. That comes at a price, and investors are weighing the cost in Friday trading.