ICT, Finance - Tesla Burning Through Cash Warns Musk
Tesla Motors chief Elon Musk sent an email to workers that warns the company could burn through it cash reserves in ten months if the company doesn't reign in what he sees as its free-spending ways.
The electric car maker finished the first quarter of 2019 with a US$702 Million loss, but with US$2.2 Billion in cash. The company raised a further $2.7 Billion to keep it afloat.
"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."
Musk says he'll determine these "hardcore" cuts with new Chief Financial Officer Zach Kirkhorn. They'll review "all expenses of any kind anywhere in the (world), including parts, salary, travel expenses, rent, literally every payment that leaves our bank account".
Tesla laid off 9 Percent of its workforce in June 2018 and a further 7 Percent in January of this year. Shares are trading at around US$211, down from $350 in December and at its lowest point since December of 2016.