Tesla’s shares closed up 5% on Monday after Elon Musk released a memo to workers, urging them to focus on lowering costs, instead of rushing to get orders out last-minute to reach the company’s end of quarter sales targets.
In the memo released Friday, Musk wrote that he does not want the company to invest heavily on “overtime, temporary contractors and expedite fees just so that cars can arrive in Q4.”
“What has occurred historically is that we run like crazy at end of a quarter to push out more deliveries, but then deliveries fall massively during the first few weeks of the next quarter,” Musk stated. “In effect, we looked at over a six month period, we wouldn’t have delivered any extra cars but we would spend a lot of money and burned ourselves out while trying to accelerate deliveries in the end of each quarter.”
Musk tweeted Monday afternoon that the end-of-quarter delivery rush will “still be really intense, just a little less than in the past.”
Tesla has recently had a hard time delivering new cars to customers in the United States in line with originally promised date ranges. That has led some Tesla customers to experience delays that have lasted months.
Even so, sales have grown this year for Tesla. Car deliveries, which are the closest approximation to sales, amounted to around 500,000 total last year.
Tesla is also reportedly making progress on its first European factory in Brandenburg, Germany, as reported by German auto news site Automobilwoche. Tesla intended to begin production of vehicles by early summer of this year in Germany, but factory construction had been delayed following a court order spurred by environmentalists who said their activity might harm hibernating lizards and snakes.
Last week, filings with the Texas Department of Regulation have shown the company is making progress on a new vehicle production factory in Austin, TX. The company is planning to invest more than $1 billion on the factory and plans to finish construction by the end of 2021.
Tesla also has plans to invest $188 million to expand its production capacity at its Shanghai factory, the state-backed Beijing Daily newspaper said late last week.
Author: Steven Sinclaire