Musk Says Tesla Will Be Profitable in Q3

Tesla CEO Elon Musk said in an early morning tweet that the electric car maker will be profitable and cash flow positive this year.

The tweet was in reply to The Economist, which shared a story saying Tesla will need to raise $2.5 billion by the end of the year.

https://twitter.com/x/status/984705630106673152

The guidance is in line with a February statement from the company that said “as we ramp production of both Model 3 and our energy products while keeping tight control of operating expenses, our quarterly operating income should turn sustainably positive at some point in 2018.”

Musk’s tweet offers specific timing of the company’s profitability and continued to deflect predictions the company will run out of cash.

In a release last week of production and delivery numbers, the company also predicted positive cash flow in Q3. “Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow,” the release said. “As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines.”

 

[AceSkywalker]

Good on them if they can, but color me 10 different shades of skeptical.

I also don't understand the need for Musk and his company to take to media and act so defensively. If they're so confident in their product, let the numbers and the machine speak for itself. And hot take, sleeping on the factory floor projects dysfunction so great that the highest levels of leadership need to personally intervene.

 

[Rockster]

I disagree. Nature abhors a vacuum and in the absence of a real information and a real presence by Musk, the media and the armchair quarterbacks will fill in the gaps with baseless speculation. This, of course, isn't going to stop it altogether, but there's benefit to seeing a calm and controlled and openly honest Musk talking about what Tesla has learned and where they're going.

 

[zxed]

Good on them if they can, but color me 10 different shades of skeptical.

I also don't understand the need for Musk and his company to take to media and act so defensively. If they're so confident in their product, let the numbers and the machine speak for itself. And hot take, sleeping on the factory floor projects dysfunction so great that the highest levels of leadership need to personally intervene.

Because the negative press changes perception and this is reflected on the market in stock value declines; since Tesla does not have hoards of cash like Apple does, stock price makes an indirect impact on its financiability - http://pages.stern.nyu.edu/~jwurgler/papers/whymktmatters.pdf

 

[MrAustraliaTax]

We've heard this same claim of becoming cash flow positive more than once before. It has never been true in the past apart from one dodgy quarter. It's unlikely to be true this time, either.

 

[Brovane]

We've heard this same claim of becoming cash flow positive more than once before. It has never been true in the past apart from one dodgy quarter. It's unlikely to be true this time, either.

Musk/Tesla has been consistent for several years that quarter-quarter profitability for Tesla was dependent on Tesla getting a mass market car (Model 3) into regular production.

From January 2015.

Tesla Won’t Turn Profitable Until 2020

"Making a rare visit to the heart of the U.S. auto industry during the city’s annual auto extravaganza, the Silicon Valley executive said Tesla’s Model 3 will need to be in full production mode by the end of the decade to turn a profit under generally-accepted accounting principles. "

 

[wschwisow]

I disagree. Nature abhors a vacuum and in the absence of a real information and a real presence by Musk, the media and the armchair quarterbacks will fill in the gaps with baseless speculation. This, of course, isn't going to stop it altogether, but there's benefit to seeing a calm and controlled and openly honest Musk talking about what Tesla has learned and where they're going.

 

[wschwisow]

I disagree. Nature abhors a vacuum and in the absence of a real information and a real presence by Musk, the media and the armchair quarterbacks will fill in the gaps with baseless speculation. This, of course, isn't going to stop it altogether, but there's benefit to seeing a calm and controlled and openly honest Musk talking about what Tesla has learned and where they're going.

This.

 

[Draxdred]

The US is $20 Trillion in debt and paying appx. $420 Billion just in Interest annually. Personally, I think The Economist and all of our other propaganda tools should be directing their efforts toward figuring out how to help our leadership clean that up and get in the black.

 

[Ulmo]

The US is $20 Trillion in debt and paying appx. $420 Billion just in Interest annually. Personally, I think The Economist and all of our other propaganda tools should be directing their efforts toward figuring out how to help our leadership clean that up and get in the black.

Agreed.

I was thinking wholesale shifting all laws, regulations, programs, taxes, and funds from the fed gov to the states, except for military and the actual courts, congress and white house themselves, would allow the 50 states to figure out how to solve Medicare, Social Security, etc. Each state would take up the deductions for those various programs, administration and future of those various programs, etc. There would have to be a one year decision phase for state residents to decide which state they want to live in, since you could "use up" your benefits faster in some states than other states.

You might see a backwards trend of retirees moving back to high tax states, and other weird stuff! Arizona & Florida would suddenly have no excuses left in their book for taking California fed tax money and spending it on themselves.

 

[thx1139]

Doesnt this also hint at Tesla holding back June deliveries into July to push the 200K sales in US into Q3. Then all those extra deliveries on product with Q2 expenses cause a bump in Q3 revenue and profit? Bigger Q2 loss and smaller Q3 loss or Q3 profit.