Elon Musk has reportedly told Tesla‘s employees that the company will run out of cash in 10 months if no changes are made in an all-staff email — which was obtained and reviewed by Reuters — on Thursday. The CEO’s message comes after the electric vehicle-manufacturer ended Q1 of 2019 with $2.2 billion USD in cash, and raised a further $2.7 billion USD to keep the company afloat in light of a $702 million USD loss that quarter.
“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!” writes 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.”
The “hardcore” expense cut will be decided by Musk and newly appointed Chief Financial Officer Zach Kirkhorn, who together will review “all expenses of any kind anywhere in the [world], including parts, salary, travel expenses, rent, literally every payment that leaves our bank account.” This news adds onto what has already been a turbulent year for Tesla, causing the stock price to plummet over the past six months.
A similar email was sent in April of last year where Musk stated he had told the Tesla financial team to “comb through every expense worldwide” to find line items that could save the company money. A year later, the company is chasing the same issues. It’s clear that Musk no longer trusts the financial team to make the right decisions with company money, and has adopted an “I alone can fix it” view of the situation.
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