Musk sticks to his guns on Tesla’s short-term production and financial targets

Musk says it is ‘quite likely’ company will be making 5,000 Model 3 vehicles a week by end of June

Elon Musk: “This is going to sound a little cheesy, but at Tesla we build our cars with love.”  Photograph: Reuters

Elon Musk: “This is going to sound a little cheesy, but at Tesla we build our cars with love.” Photograph: Reuters

 

Elon Musk has stuck to his guns over Tesla’s all-important short-term production and financial targets – while admitting that his temperament often made him overly optimistic.

Speaking at Tesla’s annual shareholder meeting, Musk said it was “quite likely” the company would hits its goal of producing 5,000 Model 3 vehicles in a single week before the end of June.

Although still well below the 10,000 a week that he had once predicted by this stage, that would still represent more than double the level of production that the company reached three months before.

It also suggested that Tesla’s manufacturing operations had rebounded after recent downtime to replace a line.

To protracted applause from shareholders, the Tesla boss also repeated his predictions that the company would be cash flow positive and reach positive net income in the third and fourth quarters of this year – in spite of forecasts from many analysts that it would need to return to the capital markets. “We do not expect to need to raise any additional debt or equity,” Musk said.

Musk, who has bristled publicly under intense criticism for much of this year, showed a moment of vulnerability in front of Tesla’s perennially supportive individual shareholders.

‘A little cheesy’

“Thank you for buying our product. We’re doing everything we can to make it as good as possible, as fast as possible,” he said, choking up briefly at the beginning of the meeting. “This is going to sound a little cheesy, but at Tesla we build our cars with love.”

Following a two-month period in which his relations with Wall Street and the media have become increasingly testy, Musk generally struck a calmer note at the electric car-maker’s annual meeting in Silicon Valley, in front of a crowd of mainly small shareholders who have been his most loyal backers.

Invited by one questioner to entertain a moment of self-reflection after the repeated delays to Model 3 production, Musk said: “I think I do have an issue with time...This is something I’m trying to get better at.”

He added: “I’m a naturally optimistic person, I wouldn’t have done cars or rockets if not. I’m trying to recalibrate as much as possible. I will probably put some sandbags on future dates, that’s probably wise.”

Predictions

In response to other questions, however, Musk continued to issue the kind of optimistic-sounding predictions that have become his trademark, and which have provided fuel for the army of speculators who have shorted Tesla’s stock.

Looking ahead to future models, he said that Tesla expected to show off its Model Y – a cross-over sport utility based on the Model 3 – next March, with production beginning in the first half of 2020.

In response to other questions, he said for the first time Tesla might enter the true mass market with a compact car in the next five years, and prodded another company executive to disclose that Tesla would announce its long-awaited first plant in China “really, really soon”. – Copyright The Financial Times Limited 2018