Tesla Probably Won't Turn a Profit in 2018, Says Venture Capitalist

While Tesla has been said to have the ability to usher in a new era of fossil fuel-free vehicles, the electric car company might have some cash flow issues that CEO Elon Musk doesn’t want to accept. Following an April 5 report from The Economist, which cited analyst worries that the company will need to raise billions this year, Musk took to Twitter to rebut those claims.

“Tesla will be profitable [and] cash flow [positive] in Q3 & Q4, so [obviously] no need to raise money,” tweeted the tech mogul. That’s a hard pill for Gene Munster, the managing partner at the venture capital firm Loup Ventures who voiced his concerns about Musk on Friday.

“I think that’s a stretch that they’re going to be cash flow positive in Q3,” he says on Cheddar’s Morning Bell. “As someone who supports the Tesla story I would love to see that happen, but we have that happening 11 quarters from now, just to put that into perspective.”

This doubt in Tesla’s profitability comes only days after reports that Goldman Sachs cut the company’s stock price target. There has also been some concern regarding the fact that Tesla missed its production target of 20,000 Model 3 cars per month in December.

While Munster’s believes in Musk’s plan to move the automotive industry away from petroleum and towards an all-electric future, he thinks he’s lost touch with reality in some aspects.

“The narrative here is that you have somebody that reminds me a lot of Steve Jobs,” he says. “Jobs had this reality distortion field where he truly believed that things were not happening could happen and I think Elon Musk for better or worse has some of those same symptoms.”

Munster might have his doubt about how much money the company will rake in at the end of 2018, but he still optimistic about Tesla being able to produce 5,000 Model 3s a week. The vehicle manufacturer will have to hit that goal in order to put itself in a spot to turn a profit.