Musk called Tesla's stock a "souffle under a sledgehammer," according to the report, if the automaker can't start delivering real profits. For the past five quarters, the electric carmaker's profits have largely come from regulatory credits. The CEO said Tesla's actual profitability is "very low at around 1% for the past year." Tesla doesn't operate a public relations department to field requests for comment, so Roadshow can't verify Musk's words. However, we believe it.
EVs are a tough cookie to crack when it comes to profitability, hence numerous stories about "affordable" EVs selling at a loss for automakers. Tesla has long hoped that more scale would push the company into the black. While it sounds like that's working, it would take a lot to sustain the California-based automaker's current stock price. In November, Tesla became worth over $500 billion, based on Wall Street's love shown. Investors continue to bank on Tesla to deliver strong profits well into the future, even if it means turning a blind eye to losses in the near term.
If investors decide they're tired of waiting, Tesla will pay a price it probably can't afford to lose. This calls for penny-pinching, according to Musk. He called on the workforce to brainstorm ways to simplify design and improve a part's cost or factory process. According to the leaked email, he argues that small ideas may start to add up.
Ultimately, it's about making Tesla cars more affordable, something Musk rallied for earlier this year when he declared his passion for afrom the company. That might happen in three years, with the help of that bring costs down. Until then, though, it sounds like Tesla's in for another round of increased frugality -- even as it plans to to scale up vehicle and battery production at the same time.