Otherwise, the company will run out of money in 10 months.
Elon Musk and Tesla’s new CFO will personally study corporate spending to save money. According to the head of the company, she has 10 months left to break even. This was reported by Reuters and Electrek , citing the Tesla internal mailing list.
In the letter, Musk noted that spending cuts are necessary despite the attraction of $ 2.7 billion. According to him, this money will run out within 10 months.
This is a lot of money, but in fact it gives us about 10 months to break even at a spending rate like in the first quarter. This is hardcore, but this is the only way Tesla can become financially sustainable and succeed in becoming an environmentally sustainable world.Elon Musk in the internal Tesla newsletter
For the sake of economy, Musk and Tesla’s new CFO, Zach Kirkhorn, will personally check “all expenses of any kind in any place, including spare parts, salaries, travel allowance, rent, and literally every payment from a bank account.”
Tesla ended the first fiscal quarter of 2019 with $ 2.2 billion in the account and a loss of $ 702 million. Because of this, in April, Musk reported that the company would have to go on a “Spartan diet” for the sake of survival.
This is not the first time Musk reports Tesla’s financial problems. In 2018, the head of Tesla also sent a letter to employees, in which he warned about the reduction of all costs that can not be justified.
Soon after, the company laid off 9% of employees, and Musk returned to micromanagement. As a result, the company still managed to overcome the difficulties with the production of Model 3 and for the first time ended thequarter with a profit.
However, high sales of Model 3 and solving production problems were not enough to keep the company afloat. In January 2019, Tesla reduced 7% of staff, and in February announced the closure of most stores to reduce costs. Soon the decision was canceled , increasing the price of cars by 3%.