In a rare mea culpa for the mercurial billionaire, Tesla CEO Elon Musk acknowledged that the company has been too reliant on robots for production. Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated. Excessive automation at Tesla was a mistake, Musk wrote, responding to a Wall Street Journal reporters tweet. Humans are underrated. He also talked about this with CBS News Gayle King, adding we had this crazy, complex network of conveyor belts ….And it was not working, so we got rid of that whole thing. Tesla has faced mounting public pressure amid a production slowdown for its Model 3, its lower-priced car. The company recently revealed that it missed its target to produce 2,500 cars a week, disappointing investors. The uncertainty has resulted in a volatile stock. A month ago shares were trading at $340 and then slid to $252. Things have started to recover now that Musk says the company will be profitable and cash flow positive in the third quarter. This was also revealed in a tweet that Musk wrote to The Economist on Friday. The Economist used to be boring, but smart with a wicked dry wit. Now its just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money. Theres no need to raise money, he added. Shares closed Friday at $300.34. The company has a market cap of $50.7 billion. By comparison, Ford Motors has a market cap of $45 billion.
Elon Musk has a fairly consistent message for all the haters and doubters and gossips and journalists and investment bankers and analysts who think Tesla is about to hit a massive financial wall: Suck it. In a tweet today, Musk again insisted that the many reports — the latest coming from The Economist — claiming Tesla will have to raise at least $2 billion this year are baloney. Why? Because he says the company is going to turn a profit in the second half of 2018. The Economist used to be boring, but smart with a wicked dry wit. Now its just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money. In the report, the Economist offered up a scathing review of how far short Tesla has fallen in terms of its production promises for the Model 3: Alas, Tesla has repeatedly failed to meet its own targets… In July 2017 Mr Musk claimed that his firm would be cranking out 20,000 Model 3s per month by December of that year. In fact, it managed to produce fewer than 2,500 in the entire final quarter of 2017. He vowed to produce 2,500 Model 3s a week by the end of March, rising to 5,000 a week by the end of June. Despite superhuman efforts by workers and managers (Mr Musk is personally supervising production of the new model and claims to be sleeping at the factory), on April 3rd Tesla confirmed that it is producing only around 2,000 Model 3 saloons a week. This production shortfall had led Moodys credit rating agency to conclude that Tesla would need to raise a bundle this year. Musk is given to brash statements, but this one carries a fair bit of risk. The company is already facing shareholder lawsuits. Now Musk is making a strong, forward-looking statement to investors. If it turns out not to be true, he could end up facing even more legal headaches down the road.