Elon Musk on Aug. 1, 2018: “In the second half of 2018, we expect, for the first time in our history, to become both sustainably profitable and cash-flow positive.”
Elon Musk on Oct. 24, 2018: “We expect to again have positive net income and cash flow in Q4, and I believe — our aspirations, I think — will be for all quarters going forward.”
Elon Musk on Jan. 30: “At this point I’m optimistic about being profitable for Q1 ... and for all quarters moving forward.”
Elon Musk on Feb. 28: “We do not expect to be profitable in Q1, But we do think that profitability in Q2 is likely.”
Elon Musk on Wednesday, after reporting more than $700 million in first-quarter losses: “We expect to return to profitability in Q3 and significantly reduce our loss in Q2.”
Catch a pattern there? When Tesla Inc. TSLA, -1.99% reported profit in consecutive quarters last year, it appeared to have finally reached a new stage in its evolution, one of the bumpiest rides many market watchers have experienced. But the electric-car maker’s erratic chief executive has continued to push back the finish line that Tesla seemed to have already crossed.
Tesla should be sustainably profitable and cash-flow positive by now, as Musk promised last August, but still nothing about this company feels sustainable or repeatable. After fighting through the tough Model 3 production ramp last year, Musk has pushed Tesla right into a Model Y production ramp and China factory build-out while making outrageous promises about autonomous capabilities.
In Monday’s presentation that produced those predictions, Musk also backtracked on his cash-flow-positive oath, saying that Tesla will likely be cash-flow-neutral until Tesla cars become a network of fully self-driving robo-taxis. While Musk promised that magical leap in autonomous capabilities and execution will happen next year, that is a pipe dream.
After powering through the problems with Model 3 production last year, Musk should have calmed Tesla down and focused solely on establishing a strong delivery process to meet — and hopefully increase — demand for the car worldwide. Instead, he has used delivery problems as an excuse for not living up to his profitability promise.
“If we were to fully optimize for profitability in Q2, I think we could do it, but then we would be unable to unwind this crazy wave of deliveries,” Musk said in Wednesday’s conference call.
Tesla has continued to move at the speed of a tiny startup, with Musk revising pricing, retail structure, automotive options and head count repeatedly, and continued to come up with new initiatives like insurance and leaf-blowers. Investors — who have driven Tesla’s stock price down more than 22% so far this year, even as the S&P 500 index SPX, -0.22% has gained 16.8% — are left to wonder where Tesla’s actual finish line is.
Don’t bother wondering. It will eventually move farther away anyway.
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