Tesla Inc will be profitable in the third and fourth quarters of 2018 and will not have to raise any finance from investors, company’s CEO Elon Musk stated on Friday, driving shares in the electric automaker higher.
Tesla has already sought this month to play down prevalent Wall Street speculation that it would need to return to capital markets in 2018 to raise more funds for the money-losing company as it increases production of the Model 3 sedan seen as important to its long-term profitability.
The Silicon Valley automaker, which has frequently fallen short of promised production targets and is battling negative publicity over a deadly crash of a car using its Autopilot system, said 10 days earlier it would have positive cash flow from the third quarter.
Musk went further on Friday in a tweeted response to a story in The Economist which pointed estimates the automaker would need $2.5 billion to $3 billion in 2018 in further 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,” writes Musk.
Tesla shares, which have gained almost 10 percent since revealing the Model 3 production estimates on April 3, increased 1.8 percent in afternoon trading on Wall Street.
Musk’s claim about profit and cash flow hinges on a rapid increase in production of the Model 3 sedan, Tesla’s latest vehicle to have experienced production delays. That has delayed revenue from reaching Tesla’s bottom line from vehicles being delivered to consumers.