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When Tesla got the Model 3 to mass production and the company finally reached profitability, Elon Musk said that was the last time the company would have to bet the company’s survival on a difficult product launch. The company would remain profitable forever more. In the 2020s, the company was supposed to see an average of 50% growth a year, reaching production of 20 million cars a year by 2030.
Musk has also made the point a few times that positive free cash flow is what’s really important. In reference to Rivian going public in 2021, Musk said: “There have been hundreds of automotive startups, both electric and combustion, but Tesla is (the) only American carmaker to reach high volume production & positive cash flow in past 100.
“I hope they’re able to achieve high production and breakeven cash flow. That is the true test.”
There have been warning signs for Tesla in the past few years, as we’ve pointed out. Demand for its cars has dropped, and dropped, and dropped, leading to various discounts and extreme cost cutting. Profit margins have declined, and profits have declined. However, the company has still been fine overall. In January of 2025, I wrote: “It achieved an operating cash flow of $14.9B in 2024 ($4.8B in Q4) and free cash flow of $3.6B in 2024 ($2.0B in Q4). The company continues to bring in cash.” That article was titled “A Real Take On Tesla’s Finances — Good, Bad, & Unknown.” It’s actually quite interesting to look back on it now.
