CEO Elon Musk has told his Employees at Tesla that they should focus more on cost reduction than hasty quarterly deliveries. The World’s richest made the appeal in an internal memo sent out on November 26. The memo was obtained by CNBC.
According to the memo, Musk does not want Tesla “spending heavily on expedite fees, overtime and temporary contractors just so that cars arrive in Q4.”
Tesla on its previous two quarterly reports has been increasing their vehicle deliveries, meaning employees have been pushing more cars out. Its 2021 second quarter’s made a whopping $1.1 Billion in profit and $11.9 billion in total revenue.
For its car segment, the Model 3 and Model X made the bulk of Tesla’s sales, with 200,000+ deliveries. Deliveries from abroad have significantly boosted its car sales. The newly built Chinese factory has been churning out cars all day long.
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Its latest report released on October 2 2021 shows that it delivered over 240,000 vehicles. Meanwhile, General Motors, the biggest Car manufacturer in the US posted a 33% year on year decline in third-quarter sales.
Tesla’s impressive increase in delivery has been worrying to Elon Musk. “What has happened historically is that we sprint like crazy at end of the quarter to maximize deliveries, but then deliveries drop massively in the first few weeks of the next quarter,” said Musk.
The electric car company has already delivered over 620,000 in over 3 quarters of 2021, while it only delivered 500,000 vehicles in the whole of the 2020 financial year. Since Tesla is hitting a maturity stage, it makes sense to focus more on cost reduction.
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