Tesla’s Emergency Plan to Avoid Bankruptcy in 10 Months
Desperate times call for desperate measures. The financial setbacks that resulted in Tesla posting a $702 million loss in the first quarter of 2019 prompted the company to raise $2.7 billion in new stock earlier this month, but the dark cloud of bankruptcy still looms.
“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!” said Tesla CEO Elon Musk.
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In an email sent to all Tesla employees and obtained by Reuters, Musk announced a “hardcore” plan to reduce and control costs in the future.
“Going forward, all expenses of any kind anywhere in the word, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed,” the controversial CEO wrote, assuring this is the only way for his company to become financially sustainable and succeed in its goal of helping make the world environmentally sustainable.
Remember, Tesla has already trimmed its staff by 16 percent between June 2018 and January 2019. Repeated adjustments to vehicle prices and available models have also been made, not to mention the closure of several Tesla stores.
The automaker needs money—and lots of it—in the upcoming months to support the production and roll-out of its brand new Model Y as well as its Gigafactory in Shanghai.