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The Musk Emails: Financial Transparency

Elon Musk uses financial transparency as an incentive for the team.

Here he lays out the facts to employees why the company anticipates it will loose money, and how they can help to put Tesla into the black for the next quarter.


August 29 2016

Original Source: first posted by Bloomberg September 6 2016

Subject line: Third Quarter Rally!

I thought it was important to write you a note directly to let you know how critical this quarter is. The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production. Once we get to Q4, Model 3 capital expenditures force us into a negative position until Model 3 reaches full production. That won’t be until late next year.

We are on the razor’s edge of achieving a good Q3, but it requires building and delivering every car we possibly can, while simultaneously trimming any cost that isn’t critical, at least for the next 4.5 weeks. Right now, we are tracking to be a few percentage points negative on cash flow and GAAP profitability, but this is a small number, so I’m confident that we can rally hard and push the results into positive territory. It would be awesome to throw a pie in the face of all the naysayers on Wall Street who keep insisting that Tesla will always be a money-loser!

Even more important, we will need to raise additional cash in Q4 to complete the Model 3 vehicle factory and the Gigafactory. The simple reality of it is that we will be in a far better position to convince potential investors to bet on us if the headline is not “Tesla Loses Money Again”, but rather “Tesla Defies All Expectations and Achieves Profitability”. That would be amazing!

Thanks for all your effort. Looking forward to celebrating with you,

Elon


Read more Elon Musk emails

Checkout The Musk Emails: The Definitive Collection

 

The Musk Emails: On Integrity

The Musk Emails: Acronyms Seriously Suck