Elon Musk's promise to ramp up Tesla Model 3 production to 5,000 cars a week by the end of June - a promise he made at Tesla shareholders at the company's annual meeting earlier this month - is clearly weighing on the CEO. A few days ago, Musk bought $25 million in Tesla shares seemingly with the intention of punching shorts in the nose (case in point: he sent the order in pre-market trading, where it would have the biggest impact on Tesla's price).
He's been beset by downgrades as Vertical Group's Gordon Johnson downgraded Tesla shares to a street-low $93 (to back up his target, Johnson calculated that the Tesla Model 3 cancellation rate has risen to a disastrous 66%). As more investors worry about Tesla's cash flow problem, Musk was forced to slash 9% of the company's staff (though the cuts reportedly didn't touch Model 3 production and won't affect targets), helping feed bears' suspicions.
And just when Musk had seemingly managed to reassure shareholders that he's finally on track to keep one of his lofty production promises (for once), CNBC published an email sent by Musk to Tesla's employees congratulating them on the company's progress - but assuring them that "radical change" is still needed.
Below is Elon Musk's Friday night e-mail in its entirety, shared with CNBC by a current Tesla employee. (The note references the GA3, GA4, and EoL -- these are general assembly lines and end of line areas within the company's Fremont plant. It also references a man named Omead, presumably Omead Afshar, a project manager in the office of the CEO at Tesla.)
From: Elon Musk
Subj. Only 8 days left to reach 700 cars/day or 5k/week
June 15, 2018
It's getting very exciting! All parts of the Model 3 production system are now above 500 and some are almost at 700 cars already. Congratulations to all on making so much progress! That said, radical improvements are still needed in paint shop output, GA3, bringing up the new GA4, End of Line and Module Zone 4 at Giga. We also need to achieve sustained, 700+ per week on the body line. Wherever you are in the company, if you feel you can help out in any of those areas, please check in with Jat Dhillon on GA3, Jerome Guillen on GA4 and Omead on EoL and JB Straubel or Christ Lister on Module Zone 4. I will be at our Fremont factory almost 24/7 for the next several days checking in with those groups to make sure they have as many resources as they can handle.
So, in the days since Tesla's annual meeting (where Musk survived a shareholder attempt to oust the company's top executives), Musk has announced 9% layoffs (which seemed to undercut his insistence that Tesla won't need to raise outside capital) and now has also been exposed for admitting that his production line needs "radical changes" with less than two weeks left before his self-imposed deadline to hit 5,000 cars a week? We're sure Musk - visionary that he is - will find a way to pull his company out of a tailspin. And we're sure he'll be ready with an explanation as more Tesla's start spontaneously combusting.