By CCN.com: Tesla CEO Elon Musk unintentionally provided the stock market with some laughs Thursday, reportedly issuing a letter to employees demanding that the electric vehicle maker deliver cars faster.
This comes as no surprise, as it seems it has dawned on Elon Musk that reality has caught up with his smoke and mirrors charade.
It is instructive to parse his brief missive to his minions to understand what he’s really saying and why even as Tesla’s stock continues to stumble.
“While our demand is strong, we have a lot of vehicle deliveries to catch up to in order to have a successful quarter.”
Elon Musk never met a promise he couldn’t keep. The stock market and Tesla shareholders have been repeatedly burned by promises of when cars would be delivered and in what volume.
Tesla and Elon Musk have backed themselves into a corner where Q1 deliveries came up short, thanks to the end of the order backlog. In fact, deliveries would’ve been even worse if Elon Musk hadn’t started discounting cars.
So Elon Musk trumpeted that Tesla would deliver 90,000 cars in Q2. He’s got four weeks to do that and the email to employees tells us those numbers are in doubt.
The memo went on to state:
“I will be holding skip-level calls with the America, Asia and Europe delivery teams every 2 days to understand what’s needed to accelerate our rate of deliveries.”
In other words, deliveries are really in trouble because Elon Musk feels the need to suddenly stay on top of what’s happening regionally.
“We also need to address the total cost of getting a car from our factory to the customer…This makes it much harder for Tesla to break even.”
Over the past four years, Elon Musk drove Tesla to a cash burn of over $7 billion. He was forced to do a capital raise from the bond and stock markets a few weeks ago in order to keep Tesla afloat.
Why become suddenly concerned about operational costs? It’s because Musk senses the walls are closing in. With Tesla’s stock price at multi-year lows and doubt as to how much more capital he can raise, he must concentrate on operations.
“…if we execute well, Q2 will be an all-time record for Tesla vehicle deliveries and an awesome victory! Super excited to make this happen with you!”
Does anyone else feel like Elon Musk sounds like Hank, the inept crime “boss” from the HBO show “Barry”? Elon Musk is not super excited about any of this.
He’s terrified. He’s panicked. He’s starting to sense that the market is losing confidence in him.
And he has every reason to believe that.
Last modified: July 2, 2020 8:09 PM UTC