Last year, Elon Musk was convinced that increasing production of the Tesla Model 3 electric vehicle would help the company significantly reduce its dependence on borrowed funds and also break even on an ongoing basis. The first quarter of this year turned out to be a disappointment: net losses reached $702 million, there were problems with logistics, old debts had to be paid off, and production volumes were not growing as quickly as management would have liked. Then the executive director of Tesla reassured shareholders that in 2019 the amount of capital expenditures would not exceed $2,5 billion, and this money would be enough not only to build a plant in Shanghai, but also to prepare for the production of the compact Tesla Model Y crossover and the Tesla Semi long-haul tractor. However, it is precisely due to the increase in the share of Tesla Model 3, and in the future Model Y, that the company's profit margin will inevitably decrease, since these electric vehicles have less added value than Model S and Model X.
In March, Tesla began cutting retail outlets and core staff in an attempt to streamline costs. Reductions have also reached personnel structures. By May, the company decided to sell shares worth $860 million and convertible bonds worth $1,84 billion, which together brought it about $2,7 billion. However, as it now turns out, even this money will not be enough for the company to implement its plans, and even just exist in the coming months.
Electrek has obtained a letter from Elon Musk, in which he urges employees to prepare for the severe austerity regime introduced by new CFO Zach Kirkhorn on his behalf. At the end of the last quarter, Tesla had about $2,2 billion on hand, but at its current level of spending, that money would run out in ten months. Unprecedented savings measures will affect wages, travel expenses, purchases of components and rent. The head of Tesla expects rationalization proposals from employees to reduce costs; such a level of involvement is welcomed. According to the company's founder, only if Tesla is financially stable can it make this world a cleaner place.
Source: 3dnews.ru