This month, Elon Musk claimed that Tesla Inc. will not be requiring another capital raise this year. It’s a bold statement after Tesla has struggled with production of their upcoming Model 3. Musk himself recently admitted that they relied too heavily on automated production and he is feeling the pressure: “I’m definitely under stress, so if I seem like I’m not under stress then I’m gonna be clear, I’m definitely under stress,” he recently told CBS. In that same interview, Musk described how the robots in the factory actually slowed the production process down at times. He also expressed that he believes the company needs to get better at meeting goals. Tesla has been experiencing a lot of struggles as of late. The car manufacturer’s stock had dropped to just above $252 on April 2, after hitting $385 several months earlier in September. Musk himself has acknowledged these issues, tweeting out an April Fool’s joke about Tesla going under.
However, Musk has never been one to back down from a challenge, and this case is no different. Now, he believes the company can start cranking out Model 3’s and put themselves back on track. Early Friday morning, in a response to The Economist, the Tesla CEO tweeted that they would be profitable in the third and fourth quarters of this year. “The Economist used to be boring, but smart with a wicked dry wit [sic],” Musk tweeted. “Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money [sic].” It’s a promising outlook, especially compared to Wall Street expectations. According to some analysts, Tesla is projected to burn through $994 million in the second half of this year. Additionally, analysts are predicting net losses of about $192 million and $35 million in the third and fourth quarters, respectively.
Regardless, Musk is staying optimistic. He believes that Model 3 production has reached a sustainable pace. “We were able to unlock some of the critical things that were holding us back from reaching 2,000 cars a week. But since then, we’ve continued to do 2,000 cars a week,” he told CBS. He went on to predict a “three or four-fold increase in Model 3 output in the second quarter.” Elon Musk may not be used to failure and he isn’t aiming to start now. However, only time will tell if he will be able to defy analysts and bring Tesla the positive Q3 and Q4 that he’s predicting.
