Elon Musk: if you do not drastically cut costs, Tesla will run out of money in 10 months

    The head of Tesla, Elon Musk, recently sent an e-mail to employees stating that if you do not cut down the company's expenses, then after 10 months Tesla Inc. run out of money . Thus, the electric vehicle manufacturer will have to take action despite the fact that a few weeks ago the company received about $ 2.7 billion .

    Musk and financial director of the company Zach Kirhorn will analyze the operating costs of any type at all points of the company's presence. Will be assessed the costs of business trips, rent, salaries of employees and other budget items.

    The company ended the first quarter of 2019 with $ 2.2 billion in accounts. But Tesla suffered a loss of $ 702 million, so Musk is going to put the company on a "Spartan" diet, in his own words. After this statement, the company managed to get $ 2.7 billion in investment, which shows investor confidence. But savings are still necessary, otherwise in 10 months the company will go bankrupt.

    “It's a lot of money, but only extreme measures will help the company stay afloat in 10 months,” Musk wrote. He said that only dramatic changes in costly articles will enable the manufacturer of electric vehicles to continue to produce their products.

    In principle, this is not the first time that Musk has applied strict measures to save money. So, just a year ago, Musk sent an e-mail to employees in which he stated that costly items, even small ones, would be revised. The company was going to cut back on everything that was not critical. He said he was “disappointed” with the number of Tesla contractors, intermediate in the electric vehicle manufacturing and sales chain. He even compared the company with a nested doll.

    Musk simplified the organizational structure of the company and did a lot to restructure the production and sales process. Last June, Tesla reduced about 9% of its staff. Then the head of the company said that the decision on mass layoffs is complicated, but it is the only one of all possible.

    All changes are needed in order to constantly increase the production of electric vehicles, including Model 3. This is necessary in order to supply 400,000 electric vehicles to customers. To increase production volumes, Tesla even launched an additional production line, turning parking into one of the assembly shops. Little by little, the company reaches the planned level of production, but financial problems remained.

    But all this was not enough to significantly reduce costs and bring the company to profit. Therefore, Tesla reduced another 7% of its employees, this time in January this year.

    The company also announced in February the closure of most of its outlets with staff reductions - this was also done to save. Only after that Tesla will be able to start selling Model 3 at the previously promised price list - $ 35,000 for the base model.

    Then the company said that many outlets will continue to work, but the cost of electric vehicles will rise. But this affected the demand - as it turned out, the company suffered a loss of $ 121 million due to a change in price. True, last year was still successful for Tesla - it managed to double the production of electric vehicles and generate revenue of $ 21.4 billion - this is more, than ever.

    Tesla even made profit in one of the quarters. But then again losses began - quite predictable and predicted by analysts, but still losses. Musk has already stated that in the second quarter of this year he does not expect profit.

    The measures that will be taken in the near future will reduce the financial problems of the company, but will not solve it. The company continues to burn cash, continuing to increase production volumes. But so far, Tesla has succeeded, so you can hope that in the future everything will be fine.

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