Cramer: Tesla needs to do big equity

Cramer talks Tesla earnings

If Tesla were to raise over a billion dollars in this market, bears and critics would be hard pressed, CNBC's Jim Cramer said Thursday.

"What they really need is to do equity," he said on "Squawk on the Street." "They should issue a gigantic convertible bond."

Read More Tesla shares climb as results beat Street

The electric car maker reported an earnings beat on Wednesday, but the stock was lower in early trading Thursday. Cramer said that was probably due to the company's reported $550 million cash burn.

"I think the balance sheet issue is going to be controllable because they have demand for this car," he said.