The CEO and founder of Tesla is more aggressively pushing back on reports that his company will fail to reach production goals or profitability.
Elon Musk accused The Economist of being “boring” on Friday after the magazine reported that his beleaguered company would be forced to raise more money from capital markets in order to stay afloat.
The Economist article, suggesting his April Fool’s Day joke about Tesla going bankrupt was far too close to the truth, said the company is in a perilous situation. Citing a loss of over $2 billion in 2017, continually missed production targets and increasingly skittish shareholders, the report determined Tesla would likely run out of money. Musk, however, responded that Tesla will be profitable by the third quarter and there is no immediate need to raise funds.
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.
— Elon Musk (@elonmusk) April 13, 2018
This isn’t the first time Musk has taunted naysayers on social media. He responded to a negative article by challenging detractors to “place their bets” on Tesla stock on April 10.
Place your bets …
— Elon Musk (@elonmusk) April 10, 2018
He also attacked a reporter earlier this month for “even writing” about the company’s growing troubles with its Model 3 production.
Can’t believe you’re even writing about this. My job as CEO is to focus on what’s most critical, which is currently Model 3 production. Doug, who I regard as one of the world’s most talented engineering execs, is focused on vehicle engineering.
— Elon Musk (@elonmusk) April 2, 2018
Announcing bold and ambitious production targets — just to see those targets wildly missed — has been a common occurrence at Tesla.
Musk vowed in July 2017 that the company would be busting out 20,000 Model 3s a month by December of that year. That goal proved way off the mark, with Tesla only managing to make fewer than 2,500 in the entire fourth quarter of 2017. He then claimed his company would churn out 2,500 Model 3s a week by the end of March and 5,000 a week by the end of June. However, Tesla’s first quarter report revealed it was only churning out 2,000 Model 3s a week.
Tesla has seemingly faced one setback after the next.
The Silicon Valley automaker has lost a whopping $4.6 billion since going public in 2010. In nearly eight years, it’s only turned a profit in two separate quarters — once in 2016 and another in 2013. Investors have mostly been fine with this as the company focuses on growing before becoming profitable. However, stock prices have recently dropped following sluggish production of its Model 3, the new and more affordable electric vehicle which Musk is banking will make a major splash on the market. Tesla shares have sunk around 20 percent since hitting a record high last September.
The beleaguered company initiated a voluntary recall in March of the Model S over corrosion issues in its power steering bolts, affecting more than 123,000 vehicles. The company attracted further negative attention when one of its semi-autonomous vehicles crashed into a roadside barrier on March 23, killing the driver and prompting an investigation by authorities. On March 27, Moody’s demoted Tesla’s credit rating and gave it a negative outlook.
Nevertheless, Musk is promising better days are ahead. In an interview with CBS, Musk vowed the company is on track to greatly increase production. “We’ll probably have, I don’t know, a three or four-fold increase in Model 3 output in the second quarter,” he confidently pledged to CBS’ Gayle King in an exchange published Friday.
The Tesla CEO, however, did acknowledge that the situation was no walk in the park. Realizing production of the Model 3 was in need of an overhaul, he began sleeping at the plant, even pulling all-nighters amid the chaos.
“I’m definitely under stress, so if I seem like I’m not under stress then I’m gonna be clear, I’m definitely under stress,” Musk admitted Friday.
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