CEO predicts carmaker to earn profit in third, fourth quarters
Fremont assembly plant had ‘excessive automation,’ he tweets
The electric-car maker will be profitable and cash-flow positive in the third and fourth quarters, the chief executive officer predicted in an early Friday morning tweet.
That’s a rosy outlook relative to Wall Street expectations. Tesla is projected to burn through about $994 million in the second half of the year, according to analysts’ average estimates compiled by Bloomberg. Analysts also are expecting adjusted net losses of about $192 million and $35 million in the third and fourth quarters, respectively.
Reasons for Musk’s optimism lie in his assessment of progress making more Model 3 sedans. The 46-year-old billionaire gave CBS This Morning a tour of Tesla’s assembly plant in Fremont, California, and said the company should be able to sustain producing 2,000 of the cars a week after resolving manufacturing issues that had been crimping output.
Tesla probably will boost Model 3 output by three- or four-fold in the second quarter, Musk told CBS. One of the factors undercutting production was too many robots at the factory.
“We had this crazy, complex network of conveyor belts, and it wasn’t working, so we got rid of that whole thing,” Musk told CBS.
In a tweet Friday afternoon, he took personal responsibility for the error.
“Yes, excessive automation at Tesla was a mistake. To be precise, my mistake,” he wrote. “Humans are underrated.”
Tesla shares rose 2.1 percent to close at $300.34 on Friday.
— With assistance by Brandon Kochkodin, Jaana Clayton, Elizabeth Wasserman, and Dana Hull