It’s all about the cashflow when you have a business. What’s leaving and what’s coming in. If you have more leaving than coming in, this is when the server problems start. For the vast majority of Tesla’s life, this has been the case. The company lost a massive $700,000,000 in the first quarter of the year after proclamations by Elon Musk that they were going to be profitable or far closer to it. With about $2.7 billion in the bank, there are not many more quarters that the company can take with that kind of loss and raising money to keep the operation floating is getting harder and harder as well. So what does it all mean? It means that Elon Musk is basically going to approve every purchase or cash outlay the company makes, seem payroll decisions to someone catering an office birthday party.
Having already reduced its workforce by 16% over the last year and change, it will be interesting to see where the next cuts come from.
The whole situation is pretty wild to watch, mainly because of Musk. Companies, especially barrier breaking startups in every industry deal with these issues (perhaps not all of them at this scale) as they try to solidify their business and make a foothold for themselves. None of those companies have a guy like Musk in charge that will shoot off his mouth and say things publicly that other executives would never dream of doing.
To be clear, we are not rooting against Tesla or its employees. We’re just fascinated by what could be the last example of a “new” car company, one that mass produces automobiles trying to survive. They have defined the odds for this long. We’ll see how much longer that lasts.
Reuters: Musk to review Tesla’s expenses in new cost cutting plan
If Elon Musk isn’t the textbook study of one being their own worst enemy I do not know what could be.
-Disclaimer- I worked for Tesla from just before the launch of the Model S through the potential sale to Google and on up to the development of the Model X.
This correct word to use is not micromanagement…it’s macromanagement. Musk simply cannot remove himself from the most mundane decisions within this fledgling company. Decisions that, seemingly, were designed to be tackled by the right people that, in the beginning, Tesla went out and hired. Imagine being thrust into a position of great responsibility only to have your every move questioned then reversed on an almost daily basis. At the root of these upheavals was almost always Musk or one of the very few he trusted to carry out his agenda. Just when you’d think that Tesla was growing up and becoming a real car manufacturer an edict would cascade upon your desk that redirected efforts to useless and frivolous pursuits. As impulsive and erratic Musk comes across on Twitter he’s ten-fold worse in real life…and cusses like a depraved sailor.
If Tesla would focus on building simple, reliable, and innovative battery electric vehicles and not spend any time and resources writing code to generate fart sounds or “auto-pilot” programs they would not be in this situation. Musk is a troubled genius that should step away from Tesla and let it become a matured car company.
You get a round of applause from me Glen, been hoping someone closer to the inside of Tesla would speak up without fear about what’s really going on. Think most intelligent people get the drift that Musk should have left the show ages ago, I personally see him driving the company into the ground and then blaming big oil or Johnny Depp for all of his and Tesla’s troubles.
The really sad part of all of this is that the cars are flipping awesome. This from a lifelong drag racer and purveyor of horsepower. The Model S makes an amazing footbrake bracket car (more than one service loaner ended up in Baytown, TX).
I would be remiss if I failed to mention what my stock portfolio might look like had Google, or more recently Apple, followed through on a purchase bid. SpaceX would be even stronger as a result.
(Imagine being thrust into a position of great responsibility only to have your every move questioned then reversed on an almost daily basis.)
kinda like Edsel Ford
Ha ha ha ha – what about buying all the unfinished Teslas when the company goes bust, ripping the electric crap out of them and slotting in good ol’ V8s!
Like Fisker and Lusk and their history.
Yeah, exactly like that;
that\’d be cool.
*Lutz, sorry
When they make the movie, Tom Hanks will play Musk.