Elon Musk says in email to employees that new cost-cutting measures are the ‘only way for Tesla to become financially sustainable’ (TSLA)May 17, 2019
- Tesla CEO Elon Musk promised new cost-cutting measures in an email to employees obtained by Electrek.
- A source with knowledge of the email confirmed its authenticity to Business Insider.
- Musk said Tesla has about 10 months of cash left at its current burn rate, and that the company’s CFO will review every page of expenses going forward.
Elon Musk has promised yet another sprint of financial discipline at Tesla.
In an email to company employees Thursday, parts of which were published by the blog Electrek, Musk said Tesla has about 10 months at its current burn rate to achieve breakeven. He also announced a new cost-cutting initiative in which executives including CFO Zach Kirkhorn will review every expense line in an effort to avoid unnecessary expenditures.
"This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable," Musk said, per Electrek.
Tesla’s finances have returned to top of mind for analysts and investors as the company slipped back into the red in its first quarter earnings report in April. The company raised $2.7 billion in fresh capital earlier in May through a new sale of stock and debt, yet the stock has continued to sink as fears of waning demand creep into Wall Street analyst reports.
Meanwhile, Musk pitched a vision for a million Tesla robo-taxis at an investor day in April, and told investors on a call hosted by Goldman Sachs that the network was a way for the company to reach a market valuation above $500 billion.
Tesla did not respond to a request for comment from Business Insider. A source with knowledge of the email confirmed its authenticity.
Shares of Tesla fell more than 4% overnight and continued their slide in trading Friday, reaching their lowest price since January 2017.
In March, Tesla laid off about 8% of its workforce in a cost-cutting move, following a slightly smaller cull in payrolls in January. At the time of the January layoffs, Musk said it was making that difficult decision in order to "never have to do this again."
More Tesla news:
- Tesla is facing mounting pressure as Audi, Mercedes, and Volkswagen ramp up their push into electric cars
- The investment giant that was once Tesla’s biggest Wall Street backer cut its stake in half last year. Now it’s dumped most of what was left.
- The driver killed in a recent Model 3 crash was traveling with Autopilot engaged, NTSB report reveals
- Tesla is updating its battery software after 2 seemingly spontaneous fires
- Tesla’s senior director of global communications is leaving the company — here are all the key names who have departed in the past year
Source of this (above) article: https://www.businessinsider.com/elon-musk-tesla-cost-cutting-is-only-way-for-financial-sustainability-2019-5