Tesla CEO Elon Musk said in an e-mail to his employees that they needed to cut costs or they could say goodbye to the company's high stock price. A copy of the letter distributed the Electrician edition.
Tesla (TSLA) stock was among the best in 2020, surging nearly 600%, making the American electric car company more expensive than any other automaker in the world.
After several years of losses, Tesla posted positive net income for five consecutive quarters in 2019-2020.
But in an email to employees, Musk acknowledged that Tesla's actual margins are quite low, only about 1%, and that the share price is driven by investor expectations for future earnings, not recent results.
"If at some point they decide that this will not happen, our shares will be immediately crushed like a soufflé under a sledgehammer," he wrote in an email.
The email focused on the importance of finding even small savings in the car assembly process.
"This is a tricky penny game that requires thousands of good ideas to improve the cost of parts, manufacturing process, or just design while improving quality and capability," Musk wrote.
In separate comments on Tuesday, Musk reiterated his earlier claim that Tesla's share price is “too high.”
