Musk Doubles Down on Tesla Cash Claim Doubted by Analysts
Musk says Tesla will be profitable and cash-flow positive in the third and fourth quarters.
(Bloomberg) -- Tesla Inc. meant what it said when telling investors this month that another capital raise won’t be necessary this year, and Elon Musk just elaborated on why.
The electric-car maker will be profitable and cash-flow positive in the third and fourth quarters, the chief executive officer predicted in an early Friday morning tweet.
That’s a rosy outlook relative to Wall Street expectations. Tesla is projected to burn through about $994 million in the second half of the year, according to analysts’ average estimates compiled by Bloomberg. Analysts also are expecting adjusted net losses of about $192 million and $35 million in the third and fourth quarters, respectively.
Reasons for Musk’s optimism lie in his assessment of progress making more Model 3 sedans. The 46-year-old billionaire gave CBS This Morning a tour of Tesla’s assembly plant in Fremont, California, and said the company should be able to sustain producing 2,000 of the cars a week after resolving manufacturing issues that had been crimping output.
Tesla probably will boost Model 3 output by three- or four-fold in the second quarter, Musk told CBS. One of the factors undercutting production was too many robots at the factory.
“We had this crazy, complex network of conveyor belts, and it wasn’t working, so we got rid of that whole thing,” Musk told CBS.
In a tweet Friday afternoon, he took personal responsibility for the error.
“Yes, excessive automation at Tesla was a mistake. To be precise, my mistake,” he wrote. “Humans are underrated.”
Tesla shares rose 2.1 percent to close at $300.34 on Friday.
--With assistance from Brandon Kochkodin Jaana Clayton Elizabeth Wasserman and Dana Hull
To contact the reporters on this story: Ryan Beene in Washington at rbeene@bloomberg.net, Esha Dey in New York at edey@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jon Morgan at jmorgan97@bloomberg.net, Arie Shapira at ashapira3@bloomberg.net, David Welch
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