Tesla shares are trading at highs, rising higher than expected after beating earnings for the last quarter 2019. A share of Tesla is presently worth $648 at the moment.
Retail and institutional investors asked CEO Elon Musk on an earnings call to discuss the Q4 results, if it might not be a good time to raise more money. They indicated that Tesla could now easily raise money at favorable rates, which could be used to either pay down its debts or speed up the company’s progress on new products and factories.
New Fund Raising
Musk, whose thoughts were shared on the call by CFO Zachary Kirkhorn and Tesla’s automotive president Jerome Guillen, said Tesla has no intention at this time of raising more money, or perhaps ever again.
“We’re spending money as quickly as we can spend it sensibly.”
“We are not artificially limiting our progress. Despite all that, we are still generating positive cash. In light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.”Tesla CEO Elon Musk
Gene Munster of Loup Ventures, who is bullish Tesla, asked Musk to speak about how much it would cost Tesla to build planned Cybertrucks, and how much Musk thinks his company could make.
Musk responded, “We don’t comment on those detailed numbers. The demand is far more than we can reasonably make in the span of 3-4 years.” Instead, he said, Tesla will be focusing on increasing battery production capacity and lowering the cost of battery production.
Musk said, “If you don’t improve that, you end up shifting unit volume from one part to another and you haven’t actually produced more electric vehicles. That’s one reason we have not accelerated production of the Tesla Semi. Because it does use a lot of cells. Unless we have got those cells available, then accelerating production of the Semi would mean making fewer Model 3 or other cars.”
“We’re trying to make the cars as affordable as possible, as fast as possible, while still being a little bit profitable and growing the company like crazy and having good free cash flow and accumulating a cash balance.”