New York (CNN Enterprise)Tesla CEO Elon Musk is telling his workers they should reduce prices or they will kiss its lofty inventory value goodbye.
Tesla ( shares have been among the many finest performers in 2020, rising practically 600% via Tuesday buying and selling, making it among the many )most valuable stocks within the nation, value greater than any main automaker. After years of losses Tesla has now reported five straight quarters of positive net income.
However in an electronic mail to workers Musk acknowledged that Tesla’s precise revenue margin is pretty low, solely about 1%, and that the inventory value is because of investor expectations of future income fairly than current outcomes.
“If, at any level, they conclude that is not going to occur, our inventory will instantly get crushed like a soufflé below a sledgehammer!” he wrote within the electronic mail, which was first reported by Electrek. Tesla didn’t reply to a request for remark in regards to the electronic mail.
The e-mail was primarily centered on the significance of discovering even small value financial savings within the automobile constructing course of.
“This a troublesome Recreation of Pennies — requiring hundreds of excellent concepts to enhance half value, a manufacturing facility course of or just the design, whereas growing high quality and capabilities,” Musk wrote. “An amazing concept can be one which saves $5, however the overwhelming majority are 50 cents right here or 20 cents there.”
Whereas Tesla has grow to be the chief in electrical vehicles, all the highest automakers are making main pushes to construct extra electrical automobiles. Basic Motors ( has introduced plans to modify to )nothing but electric vehicles, and expects 40% of the vehicles it sells to be electrical inside 5 years. A part of the inducement is that electrical automobiles might be cheaper to build as a result of they’ve fewer shifting elements than gasoline powered automobiles.
In separate feedback Tuesday, Musk repeated a press release he has made beforehand that the Tesla inventory value is “too high.”
“I even stated the inventory was too excessive. I imply what am I speculated to do,” he stated whereas rolling his eyes throughout an interview with Mathias Doepfner, CEO of know-how and media firm Axel Springer. Musk was responding to the truth that Tesla is value greater than 5 occasions as a lot as Volkswagen (, the world’s largest automaker when it comes to gross sales. )
Doepfner requested if Musk would think about using Tesla’s lofty inventory value to purchase a longtime automaker and though Musk stated he isn’t wanting to try this, he would not rule it out.
“We’re undoubtedly not going to launch a hostile takeover,” he stated. “If anyone stated, ‘Hey, we expect it would be a good suggestion to merge with Tesla,’ we might definitely have that dialog.”
Musk’s full interview with Doepfner was posted on YouTube.