U.S. Markets closed

Elon Musk Dials Back Tesla Production Forecast, Hours After Making It

Angus Whitley
Elon Musk Dials Back Tesla Production Forecast, Hours After Making It

(Bloomberg) -- Elon Musk corrected a prediction for how many cars Tesla Inc. would make in 2019, just hours after tweeting that production would reach about 500,000 vehicles this year.

The electric-car pioneer, who has a track record of snafus on Twitter, said he intended to tweet that Tesla expects to be making cars at an annual rate of about 500,000 by the end of 2019. Musk said Tesla still forecasts deliveries of about 400,000 vehicles this year.

February 20, 2019

Musk’s earlier tweet that Tesla would make about 500,000 cars in 2019 was difficult to gauge -- given his proclivity for setting stretch goals -- and was greeted with some skepticism on the social media platform. The number he put in the posting late Tuesday was roughly in line with his previous comments, but that depends on which figure investors paid attention to when Tesla reported earnings Jan. 30.

In a letter to shareholders, Chief Executive Officer Musk and his chief financial officer forecast as many as 400,000 total vehicle deliveries this year. Within hours, the CEO told an analyst on Tesla’s earnings call to expect sales for just the Model 3 to reach as many as 500,000 units in 2019.

Musk’s tweeting has been a source of confusion for investors before. The U.S. Securities and Exchange Commission moved to punish Tesla and Musk last year because it alleged he committed fraud by tweeting in August that he had the “funding secured” to take the company private at $420 a share. The agency said this and other claims the CEO made on Aug. 7 were false and misleading and affected Tesla’s stock. Both he and the company agreed to pay $20 million penalties, and Tesla said it would implement controls to oversee the tweeting and other communications of its outspoken chief.

In October, Musk tweeted that he had deleted all references to the titles he held at Tesla, then joked that in doing so, he may have confused “the authorities.” The same month, Musk trolled the SEC by calling it the “Shortseller Enrichment Commission” and ranted about short selling over the course of more than 20 hours, calling for it to be banned.

To Musk’s credit, Tesla did make substantial progress in mass-manufacturing electric vehicles last year, after overcoming the “production hell” he predicted the company would go through starting in the fall of 2017. Total deliveries more than tripled last year.

Still, making 500,000 vehicles in 2019 would be difficult based on the guidance Musk and CFO Deepak Ahuja gave late last month: that Tesla may need until the end of this year to reach a weekly production rate of 7,000 Model 3s.

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Ville Heiskanen, Sam Nagarajan

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.