Photo: Axel Springer Award
Tesla has had an incredible year, and, as it so happens, is among the few carmakers able to say that. This doesn’t mean it should rest on its laurels, CEO Elon Musk says in a leaked email.
Just last week, thanks to another surge in Tesla’s stock price, Elon Musk became the second richest man in the world, with a net worth of $127.9 billion. Tesla itself came close to a $500 billion valuation, inching closer to the goal of becoming a $650 billion company by 2028.
That’s not to say the bubble can’t burst at any moment, Musk warns Tesla staff in a new email obtained by Electrek. This kind of stock valuation means investors are putting their trust in Tesla that it will deliver good products and impressive profit, but for the time being, Tesla is yet to do the latter.
“When looking at our actual profitability, it is very low at around 1% for the past year,” Musk says. “Investors are giving us a lot of credit for future profits, but if, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!”
Excellent market valuation doesn’t mean Tesla can rest on its laurels or spend like crazy, the CEO continues. It means the focus must shift to profits and cost-cutting.
“In order to make our cars affordable, we have to get smarter about how we spend money. This a tough Game of Pennies – requiring thousands of good ideas to improve part cost, a factory process or simply the design, while increasing quality and capabilities. A great idea would be one that saves $5, but the vast majority are 50 cents here or 20 cents there,” Musk writes.
The CEO concludes his message by stating that the goal for Tesla remains that of making EVs affordable to all and, by extension, eliminating the reliance on fossil fuels and protecting our planet. Speaking of goals, Musk was recently recognized with an Axel Springer Award in Berlin, and he revealed he would be open to the idea of a merger later down the line.
That’s not to say the bubble can’t burst at any moment, Musk warns Tesla staff in a new email obtained by Electrek. This kind of stock valuation means investors are putting their trust in Tesla that it will deliver good products and impressive profit, but for the time being, Tesla is yet to do the latter.
“When looking at our actual profitability, it is very low at around 1% for the past year,” Musk says. “Investors are giving us a lot of credit for future profits, but if, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!”
Excellent market valuation doesn’t mean Tesla can rest on its laurels or spend like crazy, the CEO continues. It means the focus must shift to profits and cost-cutting.
“In order to make our cars affordable, we have to get smarter about how we spend money. This a tough Game of Pennies – requiring thousands of good ideas to improve part cost, a factory process or simply the design, while increasing quality and capabilities. A great idea would be one that saves $5, but the vast majority are 50 cents here or 20 cents there,” Musk writes.
The CEO concludes his message by stating that the goal for Tesla remains that of making EVs affordable to all and, by extension, eliminating the reliance on fossil fuels and protecting our planet. Speaking of goals, Musk was recently recognized with an Axel Springer Award in Berlin, and he revealed he would be open to the idea of a merger later down the line.
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