Alex Castro illustrated thechorus image.
In a recent memo, Musk told employees to focus on reducing costs and not rushing to make deliveries by the end of the quarter. In the November 26th memo, Musk wrote that he doesn't want the company to spend a lot of overtime and temporary contractors just so that cars arrive in Q4.
In the past, we have raced like crazy at the end of the quarter to maximize deliveries, but then they fall 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."
We sprint like crazy at the end of the quarter to maximize deliveries.
Despite global supply chain issues and a chip shortage that has hit sales from other automakers, the memo was sent a little over a month after the company was able to increase its global deliveries to over 241,000 in its latest quarter. CNBC states that there is no clear delivery target for 2021, but that it hopes to increase deliveries by 50 percent annually. In the year 2020, it delivered 500,000 vehicles, and has already delivered over 600,000 in the first three quarters of the year. It looks like there is less of a need forTesla to rush to hit its targets.
There have been delivery challenges this year. CNBC reported in August that some customers had seen their cars delayed by weeks or months due to parts shortages and manufacturing challenges. There were reports this month that cars were missing features because of the global chip shortage.
The practice of Musk telling employees to focus on costs over delivery targets has persisted within the company. This can lead to customers being rushed to take delivery of their cars, as well as create intense end-of-quarter pressures at the company.
In a recent memo, Musk said that the company is expecting a large delivery wave at the end of December, as shipments from California and China reach the east coast of the US and Europe. The CEO wants to reduce the size of these waves in the future in favor of a steadier and more efficient pace of deliveries.
He wrote that the right principle was to take the most efficient action, as though we were not publicly-traded.