Date
17 June 2019
Tesla CEO Elon Musk said net proceeds from a US$2.7 billion offering of stock and convertible notes gave the company only 10 months to achieve breakeven. Photo: Bloomberg
Tesla CEO Elon Musk said net proceeds from a US$2.7 billion offering of stock and convertible notes gave the company only 10 months to achieve breakeven. Photo: Bloomberg

Musk to review all of Tesla’s expenses in new cost cutting plan

Tesla Inc. chief executive Elon Musk told employees he will increase scrutiny of the company’s expenses in a bid to cut costs, Reuters reports.

The electric car maker earlier this month closed a US$2.7 billion offering of stock and convertible notes, giving it much needed cash as it ramps up production.

In an email to employees on Thursday, Musk said net proceeds from the offering gave Tesla only 10 months to achieve breakeven at the rate it was burning cash in the first quarter.

“That is why, going forward, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must [be] reviewed,” he said.

Tesla’s attempts to cut costs are not new. In April 2018, in an email sent to employees, Musk said he had instructed his finance team to “comb through every expense worldwide” to find possible cuts.

The company laid off 9 percent and 7 percent of its workforce in June 2018 and January this year, respectively.

The new initiative comes after a tumultuous year for Tesla which has seen analysts and investors cast doubt on its ability to produce, sell and deliver enough cars to make a sustainable profit.

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RC/CG

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