Tesla shares rise after Elon Musk urges employees to cut delivery costs

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  • Tesla CEO Elon Musk on Friday urged employees to focus on “reducing delivery costs,” rather than rushing through last-minute orders to meet quarterly sales targets.
  • Tesla shares climbed up to 5% on Monday.
  • The company is reportedly moving closer to starting production at its first European factory in Brandenburg, Germany.

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Tesla shares climbed 5% on Monday after CEO Elon Musk issued a memo to employees, focusing on reducing costs rather than placing last-minute orders to hit the company’s end of quarter sales targets. urged to do.

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In a memo distributed Friday, Musk wrote that he does not want the company to “expend heavily on fees, overtime and temporary contractors to get the car in Q4.”

“Historically it’s been that we race like crazy at the end of the quarter to maximize deliveries, but then deliveries drop massively over the next few weeks,” Musk said. “Indeed, seen over a period of six months, we may not have delivered any spare cars, but we may have spent a lot of money and burned ourselves to expedite deliveries in the last two weeks of each quarter.”

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Tesla has recently struggled to deliver new cars to customers in the US in line with the originally promised date ranges. Businesshala previously reported that some Tesla customers experienced delays in delivery for months.

Still, Tesla sales have soared this year. Vehicle deliveries, which are closest to sales, totaled around 500,000 in 2020.

According to the German auto news site, the company is also reportedly making progress at its first European factory in Brandenburg, Germany. automobile week, Tesla intended to begin production of the vehicles in Germany as early as the summer of 2021, but factory construction was delayed after a court order by environmentalists who said their activity could harm hibernating snakes and lizards.

Last week, filings with the Texas Department of Regulation revealed that the company is making progress on a new vehicle factory in Austin, Texas. Tesla plans to spend more than $1 billion on the factory and plans to complete construction by the end of this year.

The state-backed Beijing Daily newspaper reported late last week that Tesla also plans to invest $188 million to expand production capacity at its Shanghai factory.

– Businesshala’s Lora Kolodny

Watch: Tesla’s electric vehicles hit California’s big auto market

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