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Elon Musk confirmed Tesla in Profitable and Cash Flow Positive

Elon Musk

Wall Street analysts have also questioned whether Tesla would need to raise more cash, but Elon Musk on the call said that he expected the company to be henceforth profitable and cash flow positive, excluding some debt repayment, and had no plans for an equity raise.

Tesla plans to pay off its upcoming debt – some $1.8 billion comes due before November 2019 – through internally generated cash flow, Musk said. Tesla ended the second quarter with $2.78 billion in cash after spending $610 million in capital expenses. Free cash flow, a key metric of financial health, narrowed to negative $740 million in the second quarter from negative $1 billion in the first quarter, excluding solar business costs.

Tesla has begun to lay off 9 percent of its workforce as it tightens spending. Tesla said its capital expenses would be slightly below $2.5 billion in 2018, less than last year’s $3.4 billion.

Elon Musk

The company also outlined expansion plans, saying it would likely announce the location of a European factory this year and planned a Shanghai, China plant to produce both vehicles and batteries. Tesla’s China investment would not start “in any significant way” until 2019, with much of the roughly $2 billion cost to be funded via local debt.

Excluding items, Tesla reported a loss of $2.45 per share, compared with expectations of a loss of $2.92.

Total revenue rose to $4 billion from $2.79 billion.

The after-hours rise took shares to around $328. The stock has slumped 19 percent since a 2018 high of $370.73 in June.

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Shane Watson

Shane Watson

Shane is a cryptocurrency journalist and an ICO writing consultant at The Written Craft content service. He's an advocate of decentralized public control of finance, an off-grid enthusiast, and really fun at parties too.