Elon Musk speaks: Tesla expects to be cash flow positive by the end of November

Tesla Motors CEO Elon Musk has given investors and followers of the company an update on how things are going in a blog post. The headline: they expect the company to be cash flow positive by the end of November.

Musk said the made journalists misinterpreted the company’s status in the wake of an SEC filing in which the company said it was lowering projections about the number of cars it would produce:

“I would like to clear up some misconceptions that arose last week as a result of our filing a public market financial prospectus. SEC rules rightly limit interaction with the press during a financing round to prevent companies from promoting stock. Unfortunately, this made it difficult for me to respond properly when some journalists gained the wrong impression.”

Tesla earlier announced that revenue for the third quarter would fall short of original forecasts because of delays in producing the Model S. The company then shored up its balance sheet by selling more shares of stock.

Musk said in the post that the financing was an insurance policy, rather than indicating the company was in need of more cash:

“Most importantly, what did not come across well was that we raised the funds simply for risk reduction. Barring any disasters internally or with suppliers, Tesla is actually on the verge of becoming cash flow positive and will not have to spend any of the money raised, at least until we embark upon a major new vehicle program. In the public call with investors, I tried to make this point, but perhaps should have emphasized it more: we expect Tesla to become cash flow positive at the end of next month.”

Musk also said changes the company requested to its Dept. of Energy loan were technical. Indeed, Musk announced the company would pay back the loan sooner than expected:

“The DOE has simply asked if we would be willing to repay the loan early if we have excess cash. The answer is unequivocally yes and I am happy to announce that we will be initiating an advance payment today to prefund the principal payment that is due in March 2013.”

 

Dana Hull Dana Hull (233 Posts)

Dana Hull covers clean technology and energy policy for the San Jose Mercury News. She often writes about electric vehicles, the smart grid, the solar industry and California energy policy, from RPS goals to Gov. Jerry Brown's big dreams for distributed generation.