Tesla's gonna have to tighten her belt. According to Elon Musk's calculations, the company will run out of cash in just 10 months. With that in mind, he has asked his workers to look closely at all their expenses from now on.
The financial results for the first quarter of 2019 are quite clear: with $702 million in losses, the company is not exactly going through a good time. Despite its capital of $2.2 billion after paying off a convertible bond issue and after the injection of $2.7 billion more, this money will not last long. Specifically 10 months if the current spending rate is followed and Tesla does not get new funding.
What is the short-term solution?
To explain the measures that the company is going to take in the face of this situation, Musk himself sent an e-mail to his employees, to which Reuters has had access. In the email, Elon Musk asks his workers to sacrifice in order to redress the situation. "That's why, in the future, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent and, literally, all payments coming out of our bank account should be reviewed," Musk said.
This measure also implies that he himself, with the help of the financial director, Zach Kirkhorn, will be in charge of reviewing and signing all the expenses incurred by the Californian company.
"This is hardcore, but it's the only way Tesla will be financially sustainable and succeed in our goal of helping make the world environmentally sustainable."
Although last year was a good sales year, 2019 does not seem to be shaping up so well. In addition to these losses, we must add the difficulties in the distribution and delivery of Model 3, the closure of most of its stores and the increase in prices.