Tesla's Stock Offering Bought It Limited Time, Email Shows

Ten months. That’s how long Tesla’s CEO claims this month’s offering of $2.7 billion in stock and convertible notes bought the struggling automaker.

Hungry for cash to fuel new model development, a Shanghai Gigafactory, and an assembly line on which to build the upcoming Model Y crossover, Tesla has resorted to endless measures to trim costs, from moving to an online sales model and attempting to cull the bulk of its sales staff, to general staff reductions, to reducing build configurations. Vehicles prices seem to change by the week.

And still it’s not enough. To keep the automaker afloat, Musk told employees, the company will need to count every penny.

Thanks to an email seen by Reuters, we’re now aware of Tesla’s plan.

Claiming that the cash collected through the stock offering gives the company 10 months to reach a break-even point, Musk wrote, “That is why, going forward, all expenses of any kind anywhere in the word, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed.”

The plan, Reuters notes, sounds an awful lot like last year’s plan, in which the company pored over its household budget with a fine-toothed comb in a bid to fund the ramp-up of Model 3 assembly, among other expenses. Its workforce contracted by 16 percent between last June and January of this year.

After a poor deliveries report for first-quarter 2019, Tesla followed up the bad news with an earnings report that showed a $702 million loss. That put an end to the company’s two-quarter streak of profitability.

Also this week, Tesla yet again made tweaks to its vehicle pricing. In the latest move, the company increased the price of all Model 3 variants by $400, including the $35,000 Standard Range model that briefly appeared on the company’s ordering site before disappearing into the ether. One must walk into a Tesla store or call in order to buy the base car (which, it should be noted, was hailed as an “everyman’s EV” during the Model 3’s 2016 launch).

You’ll now spend $35,400 on one, assuming the sales rep doesn’t strong arm you into a Standard Range Plus.

[Image: Tesla]