17 April, 2018, 12:00 am
TESLA Inc will be profitable in the third and fourth quarters of this year and will not have to raise any money from investors, billionaire CEO Elon Musk said on Friday, driving shares in the electric carmaker higher.
Tesla has already sought this month to play down widespread Wall Street speculation that it would need to return to capital markets this year to raise more funds for the money-losing company as it ramps up production of the Model 3 sedan seen as crucial to its long-term profitability.
The Silicon Valley car maker, which has consistently fallen short of promised production targets and is fighting bad publicity over a fatal crash of a car using its Autopilot system, said 10 days ago it would have positive cash flow from the third quarter.
Mr Musk went further on Friday in a tweeted response to a story in The Economist which cited estimates Tesla would need $US2.5 billion ($F5b) to $US3b ($F6b) this year in additional funding.
“The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money,” Mr Musk wrote.
Tesla shares, which have gained nearly 10 per cent since disclosing the Model 3 production numbers on April 3, were up 1.8 per cent in afternoon trading on Wall Street.
Mr Musk’s claim about profit and cash flow hinges on a rapid rise in production of the Model 3 sedan, Tesla’s latest vehicle to have experienced production delays.