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Elon Musk reportedly says Tesla has 10 months to break even, outlines 'hardcore' cost-cutting...

By Polycount ยท 42 replies
May 17, 2019
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  1. After burning cash at an alarming rate and struggling to return to profitability, electric carmaker Tesla recently decided to take on $2 billion in debt to pad out its frighteningly-low cash reserves. Unfortunately, that cash infusion is far from a permanent fix -- at best, it could buy the company some much-needed time to increase revenue, or at least slow the rate at which it sheds money.

    Courtesy of a report from Electrek, we now know precisely how much time Tesla has before it reaches the make or break point: 10 months. This information comes from an email sent from Tesla CEO Elon Musk to staff.

    Referencing Tesla's current cash reserves (which allegedly sit at around $2.2 billion -- that number doesn't appear to factor in recent loans), Musk reportedly said the following: "This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!"

    Though Electrek has not posted the email in full, it did publish a few other notable quotes, such as one where Musk states that "every expenditure" at Tesla must be examined, "no matter how small," for the company to right the ship. As part of this examination, the CEO says that Tesla CFO Zach Kirkhorn will personally be reviewing "every page" of outgoing payments, while Musk will do the same for every tenth page.

    Musk acknowledges that these measures are extreme. "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," Electrek quotes.

    Time will tell whether or not Musk's micromanagement will lead to the success Tesla desperately needs, but the CEO has never been one to give up when the going gets tough.

    Permalink to story.

  2. Nocturne

    Nocturne TS Addict Posts: 190   +98

    Well I think this is definitely the point at which we will see if Tesla will make it or not, I wouldn't know if this is good or bad someone like Toyota might be able to get EVs with the tech portfolio close to being affordable for normal folks, but only time will tell how this will unfold.
    TempleOrion likes this.
  3. treetops

    treetops TS Evangelist Posts: 2,565   +550

    If it comes down to it they can always raise their prices for a bit. From what I've seen before they have more orders then they can fill.
    TempleOrion and DaveBG like this.
  4. yRaz

    yRaz Nigerian Prince Posts: 2,891   +2,218

    The cost of EVs is governed mostly by the price of lithium, other manufacturers are having the same issue.
    Jimster480 and Mugsy like this.
  5. Lew Zealand

    Lew Zealand TS Guru Posts: 673   +571

    Sooo... office pool.

    Which company will buy Tesla in 10 months for a nice discount and hopefully some tasty patents!
    p51d007 likes this.
  6. Uncle Al

    Uncle Al TS Evangelist Posts: 5,390   +3,779

    It's another one of his marketing stunts geared to get people buying .... nothing more. After the end he'll have a new story why they are sticking around .....
    JaredTheDragon and xxLCxx like this.
  7. Kashim

    Kashim TS Booster Posts: 99   +81

    Am I the only one who's sick and tired of this Elon Musk douchebag?
  8. yRaz

    yRaz Nigerian Prince Posts: 2,891   +2,218

    What an amazingly insightful comment, thank you for your contribution
    Milest, herbalfire, Karlos95 and 3 others like this.
  9. DaveBG

    DaveBG TS Maniac Posts: 413   +155

    Apparently - yes.
    TempleOrion likes this.
  10. baskiria

    baskiria TS Booster Posts: 78   +54

    Would you buy a premium car from a company that officially has 10 months left before going out of business with a very good chance? Can't be a marketing stunt, this is not assuring at all.
  11. baskiria

    baskiria TS Booster Posts: 78   +54

    No, he is very tiring now, tries to sell miracles with hype topping.
    Jimster480, JaredTheDragon and xxLCxx like this.
  12. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    Absolutely not!
  13. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    Have you forgotten about me Dave?

    In fact, at best, your answer only scores 6 out of 10 ballz, on the "attempted patent offhand dismissal of a relative newcomer scale". :rolleyes:
    Last edited: May 18, 2019
    wiyosaya likes this.
  14. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    That sounds like it could be interpreted as a euphemism for, "more promises than they can keep".
    Last edited: May 18, 2019
    wiyosaya likes this.
  15. Lounds

    Lounds TS Addict Posts: 196   +122

    Meanwhile VW is setting up their ID line and they'll make tons of profit because they know how build a car plant and run it efficiently.
    baskiria likes this.
  16. Reehahs

    Reehahs TS Guru Posts: 729   +472

    They don't know how to build and operate a battery plant.
    Jimster480 and TempleOrion like this.
  17. Lounds

    Lounds TS Addict Posts: 196   +122

    That's why they've made a partnership with a company that does. They said let the battery people do what they're good at and let us do what we're good at.
    wiyosaya likes this.
  18. p51d007

    p51d007 TS Evangelist Posts: 1,966   +1,230

    If you read Musk's bio, he pretty much does "startups", then ends up selling them for big $$$$
    Apparently, no one really wants this plug in, wait 3-4 hours for a recharge battery powered vehicles.
    Not to mention he's WAY behind on delivery, and, some reports the vehicles are not quality built.
    Then, there is the range. If I were even to THINK about one of these, it would have to have a 450
    mile range on a charge, quick recharge (less than an hour, say while having lunch, or a break while
    driving) and would have to have that range in ALL weather types, with all options available. Heat,
    AC, stereo, lights, windows up or down.
  19. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    That's not exactly what happened. Musk managed to talk Panasonic out of enough money to build >HIS< "gigafactory".

    And considering Musk has said Tesla has maybe 10 months left", they're not that good at building cars either.

    But then considering I'm only the most heinous of Musk pundits at this site, take that FWIW..

    So why don't you look up the world's population, the world's median income, and then tell us exactly how building $75,000 a pop Tesla roadsters, is going to "lead us on a path away from dependence on fossil fuels and save the planet".

    As for the rest of you, did any of you know that stars can't fuse lithium, boron, or beryllium"?

    The sequence goes hydrogen, helium, and then carbon.

    Which would help to explain a lithium shortage, but not the helium shortage we're experiencing now..
    Last edited: May 18, 2019
    wiyosaya likes this.
  20. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    Wow, you're enough to give some poor electric car salesman PTSD. :eek: :laughing:
    Last edited: May 19, 2019
    Jimster480 likes this.
  21. ghostf1re

    ghostf1re TS Guru Posts: 414   +265

    Why would anyone want to buy a car from them now they they see there's a timeline on whether this company is going to make it or not. That's too much of a gamble for something like a vehicle.
    Jimster480 likes this.
  22. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    See, Musk's "plan B", is most likely to want someone to buy him out. He'll obviously suffer losses if the stock drops, but he'll still walk away with hundreds of millions, if not billions. Then he'll simply move on, and find a new way to snooker people into thinking he's going to save the world. And...., he'll have a huge sob story about how, "the big automakers conspired against him", to add to his sales patter. (He has been riding that horse for quite a while, but now it would be louder and whinier).
    Last edited: May 19, 2019
  23. HyPeroxya

    HyPeroxya TS Enthusiast Posts: 86   +10

    His battery company is seperate from the Car company, and Tesla only uses his batterys. So, a gtd income there.. Whats to stop him selling off part of the company , to russia(NO!) Suadia(possibly) Abu Dbahi (maybe) or Norwegian Sovereign Fund(eco minded). Turkey or KIA ,Hyundai all could be interested. Its just giving up 100% control, which allows him to take the risky decisions, nimble , that stops him.
    TempleOrion likes this.
  24. captaincranky

    captaincranky TechSpot Addict Posts: 14,958   +3,998

    Well, Musk has been chafing at the bit to move to China. In fact, a couple of months ago, he said he'd be starting a Tesla factory there.

    He also said, "I'll be keeping the American factory open". But of course times changes, situations change, and if he can declare the American factory "unprofitable", then he just shuts it down, and moves to China.

    After all, it wasn't his fault he couldn't ramp up production enough to satisfy demand, it was that damned OSHA, and those lazy, needy, whiny, American workers, which did him in.

    So, whatever happens, you can be sure he'll walk through sh!t, and lie his way to a rosy smelling outcome.
  25. hyperspaced

    hyperspaced TS Enthusiast Posts: 31   +10

    As per usual, the easy "victims": employees' salaries !!

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