It's no secret that Tesla is having financial troubles. And, it continues to mount.
Although some would look at the company's balance sheets and point to $2.2 billion in cash at the end of Q1, that's a drop in the bucket. At the company's current burn rate, its cash position only provides 10 months of life. Don't scoff, either. Tesla's head honcho, Elon Musk, said it himself in the email — see the excerpt below. This is why the company recently completed a capital raise.
In order to try and right the ship, Musk has decided to start what he's calling a hardcore cost-cutting campaign. What's that entail? Glad you asked.
According to Musk in this companywide email, the all-new chief financial officer will review and sign EVERY outbound payment and Musk will review and sign every 10th page of documentation.
For a business at the scale of Tesla, this is unheard of, but, it's clear it's "all hands on deck" at the moment.
...In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”
He referenced Tesla’s last quarter during which the automaker lost $700 million.
Even Tesla still had a $2.2 billion cash position at the end of last quarter, Musk said that it wouldn’t last that long with their burn rate:
“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”
In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent..."
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