Elon Musk went way beyond Tesla's understated profit forecast Wednesday, saying he expects the company 'to be probably around break-even this quarter and profitable next quarter.”
With a new chief financial officer running the ship, it seemed Wednesday like Tesla TSLA, +1.81% had started down a road meant to avoid inaccurate statements: Say less, and preferably nothing solid at all. The company’s quarterly letter to shareholders was roughly half as long as in the past, and the outlook section explained that Tesla was “simplifying our approach to guidance.
New profitability: After reducing its net loss from about $700 million to about $400 million, Tesla had this much more bland statement Wednesday: “We continue to aim for positive GAAP net income in Q3 and the following quarters, although continuous volume growth, capacity expansion and cash generation will remain the main focus.”
That letter had Musk’s signature on it, but he didn’t seem to pick up the message of change within it, because his statements in a later conference call were much more specific. In the first, scripted minutes of the call, Musk flatly said “we expect deliveries to be between 360,000 and 400,000,” and proceeded to give a different profit forecast.“From a profitability standpoint, we expect to be probably around break-even this quarter and profitable next quarter,” Musk said.
In case you’re thinking, “Who cares if he is wrong about forecasts?,” the answer is the Securities and Exchange Commission. The SEC has subpoenaed documents relating to Musk’s Model 3 production forecasts and gone after him in court with claims that he misstated a forecast on Twitter. Critics also use these types of forecasts against the company, with good reason, and investors could sue, as they have in the past.
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