Published on September 7th, 2016 | by James Ayre0
Tesla CEO Elon Musk’s August 29 Email To Employees Calls For 3rd Quarter Rally For Profitability (Full Email Text)
September 7th, 2016 by James Ayre
An email that was reportedly sent by Tesla Motors (TSLA) CEO Elon Musk to employees on August 29, that is now apparently available in full via a leak Bloomberg obtained, features a number of interesting comments. In particular, Musk’s comment that the company is tracking a few percentage points negative on cash flow and GAAP profitability for Q3 2016 stands out.
His comments that this situation can be rectified, and that Tesla can show positive cash flow and profitability for the quarter if production goes well enough, are a key point of the letter. Most of the email is a call for a production rally.
Another interesting comment in the email is the note that Q3 will essentially be the last time that the company can show a positive position until the Model 3 reaches full production in late 2017, which is why he’s pushing for “all hands on deck” to try to make that happen.
Here’s the full text that Bloomberg has published:
I thought it was important to write you a note directly to let you know how critical this quarter is. The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production. Once we get to Q4, Model 3 capital expenditures force us into a negative position until Model 3 reaches full production. That won’t be until late next year.
We are on the razor’s edge of achieving a good Q3, but it requires building and delivering every car we possibly can, while simultaneously trimming any cost that isn’t critical, at least for the next 4.5 weeks. Right now, we are tracking to be a few percentage points negative on cash flow and GAAP profitability, but this is a small number, so I’m confident that we can rally hard and push the results into positive territory. It would be awesome to throw a pie in the face of all the naysayers on Wall Street who keep insisting that Tesla will always be a money-loser!
Even more important, we will need to raise additional cash in Q4 to complete the Model 3 vehicle factory and the Gigafactory. The simple reality of it is that we will be in a far better position to convince potential investors to bet on us if the headline is not “Tesla Loses Money Again”, but rather “Tesla Defies All Expectations and Achieves Profitability”. That would be amazing!
Thanks for all your effort. Looking forward to celebrating with you,
Complete our 3-minute reader survey!
Sign up for our free daily newsletter to never miss a story.
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.