PE Ledger

Thursday, January 26, 2023

Elon Musk has urged Tesla employees to cut vehicle delivery costs

Tesla CEO Elon Musk advised employees to focus on “minimizing cost of deliveries” rather than rushing car deliveries to meet end-of-quarter targets on Friday.

In a company-wide email acquired by CNBC on Friday, Tesla CEO Elon Musk urged employees to seek methods to minimize the cost of delivering electric vehicles to consumers, rather than rushing orders out last minute to meet the company’s end-of-quarter sales objectives.

This year, Tesla has failed to meet its deadlines for delivering new cars to consumers in the United States. As previously reported by CNBC, some Tesla customers in the United States have encountered months-long delivery delays, forcing them to pay out of pocket for rentals and ride-hailing apps, as well as reapplying for loans owing to missed deadlines.

Tesla isn’t the only company that has kept customers waiting longer than they expected for their new completely electric vehicles. Rivian Automotive, a recently public competitor, for example, alerted customers who had reserved an R1S sport utility vehicle of delivery delays last week.

Despite this, Tesla’s sales have increased this year, presumably unaffected by the uncertainty of delivery schedules.

Vehicle deliveries, which are the most accurate representation of Elon Musk’s electric vehicle and renewable energy business sales, totalled over 500,000 in 2020. Tesla had already delivered 627,350 automobiles throughout the first three quarters of 2021.

The corporation has not provided a clear aim for 2021 vehicle deliveries since the start of the year. However, on its third-quarter earnings call, Tesla reiterated its broad projection for “50 per cent average annual growth in vehicle deliveries” over a multiyear timeframe.

Junheng Li, Head of Research at JL Warren Capital, wrote to investors last week that she expected Tesla sales to continue to climb this quarter, at least in China. “The country’s soaring gas prices favour all new energy car makers,” she said.

According to a Canalys study, 1.3 million electric vehicles will be sold in China in 2020. According to the business, EV sales in China will reach 1.9 million by the end of this year.

China continues to be the world’s biggest market for new automobiles, with substantial government support for electric vehicles.

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