Just when you may have started to feel like the Tesla ‘leaks’ were getting a bit heavy-handed, it looks like we have another one. A new email from Tesla CEO Elon Musk boasts of strong demand and a need to catch up on deliveries in order to make Q2 successful.
The Newest ‘Leaked’ Email
Take a look at the email which was originally sent out to Tesla employees on Wednesday:
While our demand is strong, we have a lot of vehicle deliveries to catch up to in order to have a successful quarter.
Starting tomorrow, I will be holding skip-level calls with America, Asia, and Europe delivery teams every 2 days to understand what’s needed to accelerate the rate of deliveries.
We also need to address the total cost of getting a car from our factory to the customer. Last quarter, there were many expedites (sic) fees and routing inefficiencies that led to higher than expected delivery costs. This makes it much harder for Tesla ro (sic) break even.
Per my earlier email, if we execute well, Q2 will be an all-time record for Tesla vehicle deliveries and an awesome victory!!
Super excited to make this happen with you.
While some analysts continue to beat Tesla down in the media, Musk seems determined to remain upbeat and positive.
Tesla Deliveries In Q2
Part of the reason why earnings in Q1 were so bad this year was, according to Musk, due to logistical challenges with deliveries. Tesla currently has only one operational factory to produce three different cars that ship globally.
“As noted in our Q1 2019 Vehicle Production & Deliveries letter, due to unforeseen challenges we had only delivered half of the quarter’s numbers ten days before the end of the quarter. This caused a large number of vehicle deliveries to shift into Q2,” stated Tesla’s Q1 financial report, meaning that the revenue for those sales did not count until Q2.
The emphasis that Musk places on increasing delivery speed in his newest email is encouraging and hopefully means that Tesla can avoid the unfortunate delays it encountered last quarter. ‘Hopefully’ being the keyword. Tesla does have an unfortunate track record of bottlenecking deliveries at the end of each quarter, but so far has failed to overcome the known issue during the past few years.
Focus On Delivery Cost
As he did in past leaked emails, Musk is concentrating on controlling costs throughout the entire company, individual by individual. While he and his CFO will continue to review company payments, Musk will also presumably be working closely with his international delivery teams to make sure that delivery costs are kept as low as possible.
This, in turn, will help Tesla’s bottom line, and hopefully coax them back into a profitable quarter.