Elon Musk To Tesla Employees: Spend Less Cash, Deliver “Every Car We Possibly Can”

As anyone who follows Tesla Motors [NASDAQ:TSLA] will tell you, the California company is known around the world for several things: making class-leading high-end luxury electric cars, pushing itself to make the impossible possible, burning through cash at an alarming rate, and for the most part proving naysayers wrong.

Tesla is facing tough times, but it has a history of making

Elon Musk wants Tesla to prove each and every naysayer wrong.

Over the past ten years, the company has continued to push itself ever-harder to bring Tesla CEO Elon Musk’s dream of a zero-emission society to realit. As a consequence, Tesla has found itself time and time again trying to find new, more efficient ways of doing things in order to save time and money. Indeed, as many former employees will attest — though not all will do so publicly — Tesla is known for pushing its employees hard, asking them to go above and beyond the call of duty for the greater good of society, the planet, and of course, Tesla’s bottom line.

Many would go as far as to argue that it is the responsiveness of Tesla staff, and their willingness to buy into Musk’s vision, that has allowed Tesla to get so far so fast.

Tesla certainly has the support of its fans.

Tesla certainly has the support of its fans.

But as Tesla prepares to push itself further than ever before both financially and physically with the impending acquisition of California solar panel specialist SolarCity, Elon Musk is yet again asking Tesla staff to dig deep and do the seemingly impossible in order not only to keep the company well-funded by cash flow positive. This time, he made the request in a recent internal email sent to each and every Tesla Employee.

As Bloomberg reported on Friday, it’s all part of Elon Musk’s desire to see Tesla turn a profit by the end of Q3, a promise he made to investors and Wall Street back at the start of this year during Tesla’s final 2015 earnings report. Were Tesla to meet that commitment, it would not only be able to ensure that Tesla keeps its investors happy but (more importantly for Musk) give Tesla’s critics the finger.

“The simple reality of it is that we will be in a far better position to convince potential investors to bet on us if the headline is not ‘Tesla Loses Money Again,’ but rather ‘Tesla Defies All Expectations and Achieves Profitability.’” Musk’s email reads. “That would be amazing!”

“[We’re] on the razor’s edge of achieving a good Q3, but it requires building and delivering every car we possibly can, while simultaneously trimming any cost that isn’t critical, at least for the next 4.5 weeks,” Musk confides. “I thought it was important to write you a note directly to let you know how critical this quarter is…The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production.”

Tesla employees are known to go above and beyond for the company.

Tesla employees are known to go above and beyond for the company.

The email, which was sent to employees just ahead of the long holiday weekend, comes on the tail of the announcement last week that Tesla was in the process of seeking additional investment to ensure a positive cash flow for the next few years. That announcement, made during an official filing with the Securities and Exchanges commission concerning Tesla’s acquisition of SolarCity, discussed the possibility of Tesla raising funds through an additional secondary public stock offering as well as a potential debt sale.

Without such funding, Tesla — whose balance sheets showed a $2.2 billion cash burn last year and a sizable $611 million drain during the first two quarters of this year — will be in dire straights. That’s exactly the opposite of where Elon Musk wants Tesla to be.

To reinforce the point, Musk’s email reminds Tesla staff that Tesla has plenty of people who want it to fail, but that he’s not willing to let that happen. Instead, he jokes that “It would be awesome to throw a pie in the face of all naysayers on Wall Street who keep insisting that Tesla will always be a money loser!”

Behind the joke however is the very real threat that Tesla could yet again find itself in dire financial difficulties, its reach exceeding its grasp yet again. Yet while that very thought scares many on Wall Street, it’s worth remembering that Tesla — with Elon Musk at its head — has a reputation as for making the seemingly impossible a reality.

And that, as we reminded you at the top of this article, is one of the reasons Tesla is unlike other automakers out there. The tough bit is trying to figure out if that’s an ongoing state, fueled by optimism and staff going beyond the call of duty, or if it’s a transitory phase Tesla has managed to remain in for far longer than most companies.

Only time, and money, will tell.



Want to keep up with the latest news in evolving transport? Don’t forget to follow Transport Evolved on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.

You can also support us directly as a monthly supporting member by visiting Patreon.com.

Related News