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Tuesday, January 19, 2021

Tesla CEO Elon Musk on what he thinks is ‘Game of Pennies’

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2020 has been a good year for both Tesla and its CEO Elon Musk. Musk became the second richest man in the world, thanks to Tesla’s stock doing really well. However, Musk has had more than a few words of caution — and intriguing analogies — for Tesla employees. According to a report by CNBC, Musk sent an email to all Tesla employees in which he said that the company had to get smarter about spending money. “This is a tough Game of Pennies, requiring thousands of good ideas to improve part cost, a factory process, or simplify the design while increasing quality and capabilities,” Musk wrote in his email. He also said that Tesla had to make electric cars affordable for the “electric revolution” to happen, as per the CNBC report.
Here’s Musk’s email to Tesla employees:
At a time like this, when our stock is reaching new heights, it may seem as though spending carefully is not as important. This is definitely not true!
When looking at our actual profitability, it is very low around 1% for the past year. Investors are giving us a lot of credit for future profitability but if, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a souffle under a sledgehammer!
Much more important, in order to make our cars affordable, we have to get smarter about how we spend money. This is a tough Game of Pennies, requiring thousands of good ideas to improve part cost, a factory process, or simplify the design while increasing quality and capabilities. A great idea would be one that saves $5, but the vast majority are $0.50 here or $0.20 there.
In order to make the electric revolution happen, we must make electric cars, stationary batteries and solar affordable to all.
Thanks and great working with you as always,
Elon

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