FILE PHOTO: Tesla CEO Elon Musk leaves Manhattan federal court after a hearing on his fraud settlement with the Securities and Exchange Commission (SEC) in New York City, USA April 4, 2019. REUTERS/Brendan McDermid/File Photo
(Reuters) – Tesla, Inc. Chief Executive Officer Elon Musk told employees on Thursday that he will increase scrutiny of the company’s costs in its latest initiative to cover the costs of the electric car maker.
Tesla earlier this month closed a $2.7 billion offering of shares and convertible bonds, which the much needed cash if the slopes of the production.
Musk in an e-mail to employees, seen by Reuters, said the net proceeds of the offering gave Tesla only 10 months to reach break-even at the rate it was burning cash in the first quarter.
“That is the reason why, going forward, all costs of any nature anywhere in the word, including parts, salary, travel expenses, rent, literally each and every payment that leaves our bank account should be evaluated,” Musk said.
Tesla’s efforts to make the costs are not new. In April 2018, in an e-mail to send to employees, Musk said that he had instructed his financial team to “comb through all the editions all over the world” to find possible cuts.
More recently, Tesla explained 9 percent and 7 percent of the workforce in June 2018, and in January, respectively.
The new initiative comes after a tumultuous year for Tesla, which has seen analysts and investors doubt about his ability to produce, sell and deliver enough cars to make a sustainable profit.
Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli and Cynthia Osterman