Musk: Tesla ‘probably’ won’t raise capital early next year

tesla model 3

YouTube/Motor Trend

The Tesla Model 3.

Tesla reported third-quarter earnings on Wednesday and beat analysts’ expectations by a wide margin, although the result was somewhat confusing due to Tesla’s switch in accounting methods.

There’s been ample speculation that Tesla will need to return to the public markets to raise capital.

But on a conference call with analysts after earnings were reported, CEO Elon Musk said that no new capital whatsoever would be required for the remainder of 2016, and that Tesla’s current balance sheet is strong enough to launch its mass-market Model 3 without raising more money.

“But that’s different from saying that we shouldn’t raise capital,” Musk said, not taking the issue completely off the table. He said that Tesla could raise capital to use as a buffer, for example.

Stressing that he was speaking speculatively and that the situation might change, he added that Tesla would “probably” not do a capital raise in the first quarter of 2017.

Tesla currently has more than $3 billion in cash on its balance sheet and expects to continue increasing production — and, as a result, grow revenue through 2017.

However, with shares now trading above $200, and with some of the usual factors that have driven the stock down in previous first quarters — mainly missing guidance on vehicle deliveries — Musk might be able to drop the “probably.”

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