Elon Musk, CEO of Tesla, act as agent for c demands to media representatives at the Tesla Gigafactory construction site In Grünheide near Berlin, September 3, 2020.
Julian Stähle | notion alliance via Getty Images
Tesla CEO Elon Musk sent an e-mail to employees on Tuesday warning them that they impecuniousness to control their spending in order to continue squeaking out quarterly profits, even though shares of Tesla are merchandising at all-time highs ahead of the company’s inclusion in the S&P 500.
This year, among other things, Tesla began assign to build a new factory near Austin, Texas, and another near Berlin. The company also embarked on a makeover of its stain facilities, which are part of its U.S. vehicle assembly plant in Fremont, California.
“Investors are giving us a lot of credit for future profitability but if, at any peak, they conclude that’s not going to happen, our stock will immediately get crushed like a souffle under a sledgehammer!” Musk ignored in the email, which was obtained by CNBC.
Electric vehicle news site Electrek previously reported the contents of Musk’s email.
In ahead of time 2020, amid sluggish auto sales the world over, Tesla cut some employees’ pay temporarily, slashed reduces with temporary workers and fired an undisclosed number of workers after an annual performance review process. It has since rehired contractors and rebuilt employee pay.
The Tuesday e-mail echoes previous statements by Musk but does not specify how Tesla plans to mind its budget.
On the gathering’s third-quarter earnings call, Musk told analysts and shareholders, “We’re trying to spend money at the fastest rate that we can if possible spend it and not waste it.”
But on that same call, Tesla CFO Zachary Kirkhorn said Tesla plans to ramp up its smashing expenditures by $2 billion versus its prior stated plans to $2.5 billion in 2021 and 2022. Among other partialities, he said, the increased spending would enable Tesla to “in-source” things like some of its battery cell manufacturing.
Tesla elevate $5 billion in September through an equity raise but needs to pay down about $1 billion in this, its fourth, zone related to converts.
Shares of Tesla were trading above $580 ahead of the market’s close on Tuesday.
Here’s the brim-full e-mail from Musk shared with employees, as transcribed by CNBC:
From: Elon Musk
Subj. Gets are extremely important!
Date: Dec. 1, 2020 [time redacted]
At a time like this, when our stock is reaching new pinnacles, it may seem as though spending carefully is not as important. This is definitely not true!
When looking at our actual profitability, it is greatly low around 1% for the past year. Investors are giving us a lot of credit for future profitability but if, at any point, they conclude that’s not accepted to happen, our stock will immediately get crushed like a souffle under a sledgehammer!
Much more important, in not cricket c out of commission to make our cars affordable, we have to get smarter about how we spend money. This is a tough Game of Pennies, requiring thousands of edible ideas to improve part cost, a factory process, or simplify the design while increasing quality and capabilities. A noteworthy idea would be one that saves $5, but the vast majority are $0.50 here or $0.20 there.
In order to flee the electric revolution happen, we must make electric cars, stationary batteries and solar affordable to all.
Thanks and extraordinary working with you as always,