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