Tesla Chairman and CEO Elon Musk said Tesla will likely seek more capital from investors, to hedge against risk as it completes its build-up of its anticipated Model 3 sedan.
Speaking on a conference call after Tesla announced its fourth-quarter results on Wednesday Musk said the company does not yet need to raise capital to finish its Model 3 production ramp, but that not doing so would bring the company "close to the edge," which he said was "probably not the best thing for shareholders."
"I think it makes sense to raise capital to reduce risk," Musk said on the call. He said Tesla is evaluating its options for raising more cash, but did not give any indication of when that may happen.
Analysts had suspected that Tesla would take advantage of the recent jump in its share price to raise more money. The stock hit a 52-week high of $287.39 on Feb. 13, before retreating.
In the wake of the earnings news, the company's stock was recently up 1.6 percent at $278.00 in after hours trading.
The recent gains have boosted Tesla's market capitalization within reach of companies that sell many times the number of cars Tesla delivers. For example, when Tesla shares established a new 52-week ceiling, its market capitalization was nearly as large as that of Ford. But Tesla delivered just shy of 80,000 cars last year, while Ford delivered more than 6 million.
Tesla has held a few offerings since its initial public offering in 2010, and the amount of money it has burned through has become a cause of concern among some analysts. Tesla has only had two profitable quarters since it went public.
Cash increased by $300 million, from $3.1 billion at the end of the third quarter, to $3.4 billion in the fourth quarter. However, analysts said if it hopes to go from producing the roughly 80,000 cars it made last year to its stated goal of producing 500,000 annually by the end of 2018, it will need more funding.
The company may also have to rely on capital expenditures to integrate recently acquired SolarCity, or fund further expansions of its battery factory or its stationary power storage business.