Tesla CEO Elon Musk Claims Automaker Will Be out of Money Within 10 Months, Launches "Hardcore" Changes
【Summary】In an all-staff email obtained by Reuters and Electrek, Elon Musk told employees that the electric automaker would run out of money in roughly 10 months, claiming that “hardcore” cost-cutting efforts are needed to keep the company afloat.
Electric vehicles aren't cheap to make. That's a lesson that traditional automakers, like General Motors, have had to learn the hard way. But if there was one company that everyone thought would lead the electric revolution, it's Tesla. Despite the automaker's financial woes, the brand has always found a way to keep the wheel churning, coming out with smarter, more high-tech machines that no one can replicate. Unfortunately, it sounds like Tesla will run out of money within a year.
Tesla's In Hot Water
According to an employee-only email obtained by Reuters, Tesla CEO Elon Musk told workers that Tesla would be out of money in roughly 10 months, as the company is struggling to get back on a good footing after going through money at an incredible rate during the first quarter of 2019.
"That is why, going forward, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed," stated Musk.
Musk said that "hardcore" cost-cutting measurements would need to be taken to keep Tesla going. The $2.7 billion that Tesla earned earlier this month isn't enough, either. So, by going on an extreme money-saving endeavor, Tesla might be able to keep making state-of-the-art electric cars.
As The Verge outlines, Tesla had $2.2 billion in cash after the first quarter of this year, but the company lost $702 million in April, causing the company to save money through whatever means possible. In light of its financial situation, Tesla went out to raise money and managed to get $2.7 billion.
This Isn't The First Time Tesla's Had Financial Issues
"This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!," wrote Musk. "This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable."
Anyone that's kept an eye on Tesla's financial woes will know that this isn't the first time that the company has had to take drastic measures to save money. Things Tesla has done to cut costs include cutting the number of contractors it works with and lay off 9 percent of its employees.
Ever since the introduction of the new Model 3, Musk has stated that the affordable electric vehicle will help the company turn a profit. But that clearly hasn't happened, despite the introduction of the so-called "$35,000" model.
Things, clearly, aren't looking too good for Tesla, and if the company were to go under, it wouldn't be a good thing for EVs in general. Tesla makes some of the most popular electric cars in the world and the automaker was the first to hit the federal government's 200,000 cap for the tax credit – so popularity has never been an issue. Nonetheless, money has always been an issue for Tesla.
Vineeth Joel Patel
Joel Patel has been covering all aspects of the automotive industry for four years as an editor and freelance writer for various websites. When it comes to cars, he enjoys covering the merger between technology and cars. In his spare time, Joel likes to watch baseball, work on his car, and try new foods
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