Elon Musk says Tesla will cut costs to avoid bankruptcy

Tesla: In Deficit, the Company will Cut Costs to Avoid Bankruptcy, According to Elon Musk

Finance

DRASTIC: Each of the expenses at Tesla will be combed and approved by the CFO

Tesla employees will have to tighten their belts. Driven by the difficulties of production of its Model 3 , the American manufacturer reports a loss of 700 million dollars in the first quarter of 2019, reports Electrek site relayed by  Clubic .

Aware of this critical situation for his group, Elon Musk has already announced that Tesla will also be in deficit in the second quarter. In an attempt to turn the tide, the US entrepreneur announced last week a drastic plan to reduce costs.

An “extreme” procedure to avoid bankruptcy

In an email to employees, the CEO asks them to review “all Tesla expenses, regardless of their importance.” Each expense will be scrutinised, from “components to wages through travel expenses and rents,” says the email. Zach Kirkhorn, the Group’s new CFO, will validate each expense himself.

This is an “extreme” procedure, recognises Elon Musk . But for him, “this is the only way for Tesla to become financially stable and achieve its goal.” At the same time, all employees are invited to propose solutions to save money. According to Elon Musk, the company would have more than a few months to avoid bankruptcy and return to the path of profitability.

Tesla: In Deficit, the Company will Cut Costs to Avoid Bankruptcy, According to Elon Musk 1

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