As expected, electric carmaker Tesla on Wednesday said it burned cash in the first quarter of the year after two successive quarters in which it generated $900 million in free cash flow. But the first quarter burn of $919 million means Tesla has just $2.2 billion left in cash. Tesla said, however, that it expects to generate positive free cash flow for the next three quarters and generate a profit in the third quarter while continuing to boost vehicle production.
That may have calmed investor nerves: Tesla stock was up marginally after hours. Investors may also have been pleased by CEO Elon Musk’s statement on a conference call that there is “merit” to the idea of raising capital, a change from the past year or so when he said it was not in the cards.
And some bad news was baked in. Tesla three weeks ago disclosed a dip in deliveries in the first quarter, in part due to weaker electric car demand in the U.S. after the end of a tax credit, and its stock tumbled on that news.