Tesla CEO Elon Musk confirmed on Friday that the electric car maker won’t need to raise cash to fund production of the Model 3, throwing cold water on a downbeat report.
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In an overnight missive on Twitter, Musk responded to a story from The Economist, saying there will be “no need” for Tesla to seek outside funds, adding that Tesla will record a profit and positive cash flow in the third and fourth quarters of this year.
Musk’s forecast is consistent with Tesla’s most recent financial guidance, which said quarterly operating income “should turn sustainably positive at some point in 2018.” Last week, Tesla said it would see strong positive operating cash flow in the third quarter. The company also continues to target a weekly production rate of 5,000 Model 3 sedans by the end of the second quarter, despite starting the quarter at a rate of 2,000 vehicles.
Tesla shares rose 2.1% in Friday trading.
The tweet from The Economist cited a report from investment bank Jefferies, whose analysts predict that Tesla will need to raise an additional $2.5 billion to $3 billion in capital this year.
Musk also responded to an analyst report from Goldman Sachs this week. After Goldman Sachs cut its price target for Tesla’s stock, Musk wrote on Twitter, “Place your bets.” Like Jefferies, Goldman Sachs floated the possibility that Tesla will seek to raise money to support new capacity and product expansion, although Tesla has said it won’t require extra cash to fund the Model 3