Elon Musk promises Tesla profts by the end of the year

feedback@motor1.com (Dominik Wilde)
Elon Musk Warning About AI

The Californian carmaker has endured constant struggles recently.

Tesla boss Elon Musk has vowed that the Californian electric car manufacturer will return a profit by the second half of the year.

The company has endured a number of difficulties recently, including production bottlenecks and severe mounting debt, but Musk, who also helms SpaceX, can see light at the end of the tunnel.

Musks comments come after financial magazine The Economist reported that Tesla would need to raise nearly £2 billion this year just to keep going. Posting on Twitter, Musk hit back, saying: 'The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh).'

'Tesla will be profitable & cash flow+ in Q3 & Q4, so obv [sic] no need to raise money', he insisted.

Tesla shares jumped by 1.8 percent following Musk's Twitter post, having already climbed 10 percent since in confirmed Model 3 production numbers at the start of the month.

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Tesla Model 3 Begins Production

The Model 3 (above), Tesla's first so-called 'entry-level' offering has endured a difficult birth, with a number of quality contol issues, delivery delays, and manufacturing bottlenecks that led to Musk describing the car's production as 'hell'.

Tesla's proposed return to profitability later this year will be good news for billionaire Musk, who won't be receiving another paycheck from Tesla until the company makes money.

It said Musk 'will receive no guaranteed compensation of any kind – no salary, no cash bonuses, and no equity that vests simply by the passage of time.'

Musk's new incentive includes a decade-long grant of stock options broken into 12 portions that Musk will only get if certain milestones are met by the company. The first milestone is to increase Tesla's market capitalisation to £72bn, with more stock options opening up at £36 billion intervals.

'Thus, for Elon to fully vest in the award, Tesla's market cap must increase to £465 billion,' the US tech company said. To achieve the operational milestone, the California-based firm said it must meet a set of ever-increasing revenue and adjusted earnings targets, which come before interest, taxes, depreciation and amortisation targets.


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