Musk Tells Tesla Employees to Focus on Reducing Delivery Costs

In an email to employees, Musk said that although the company spends a lot of money, rushing and spending lots of money does not deliver more cars.

In his email, which was sent on Friday and obtained by CNBC, Musk told workers to focus on reducing the cost of deliveries, instead of spending buckets of money on expedite fees, overtime, and temporary contractors just to ensure that cars reach customers in the fourth quarter of the year.

The closest thing to sales data the company releases is its vehicle deliveries, as its sales are global. In the third quarter of this year, the company made 241,300 deliveries.

In the past, Musk wrote, "We sprint like crazy at end of quarter to maximize deliveries, but then deliveries drop in the first few weeks of the next quarter." We won't have delivered any extra cars but we will have spent a lot of money and burned ourselves out to accelerate deliveries in the last two weeks of each quarter."

The CEO said that the company has a big wave of deliveries in the last few weeks of December because it hadn't achieved high volume production of cars in Europe or Texas yet. There are many cars being transported on boats from China to Europe, where there is a production capacity of 450,000 electric vehicles per year.

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New cars are being delivered on trucks and trains from California to the East Coast. These cars will arrive late in the quarter. Musk said that it was time to start reducing the size of the wave and focus on getting a more steady and efficient pace of deliveries.

Musk said that the right principle was to take the most efficient action, as though we were not publicly-traded.

It is easy to say that you own the most valuable car company in the world, despite Musk trying to push down the value of the company's stock. He said that the stock price of the company was too high, which wiped billions off the company's market value.

Musk's email makes perfect business sense, but it may not be good for customers who are expecting deliveries over the next few weeks. Many customers of the company have been waiting for months for their new cars and have had their delivery dates changed many times. Some of these customers are having to pay more for rental cars and ride-sharing services. The delays could affect the loan rates and insurance quotes of customers who financed their new cars.

In October, the company had its biggest quarterly net earnings in history. The company acknowledged its delivery delays due to global supply chain and logistics challenges. This year it has delivered over 600,000 cars.