Tesla CEO Elon Musk has sent out his typical email to help push employees to deliver as many vehicles as they can before the end of the quarter. Except this time he has taken a different approach, and asked employees to focus on a different area – efficiency.
In the email sent last night, a copy of which was obtained by Drive Tesla, Musk said the focus over the next few weeks “should be on minimizing *cost* of deliveries.”
This is a markedly differently approach from previous end of quarter rushes. Musk notes in the email the historical approach is to spend “heavily on expedite fees, overtime and temporary contractors just so that cars arrive in Q4.”
Musk said that the massive rush has always led to an equally massive drop off in deliveries in the first few weeks of the next quarter. He explained this new approach will mean the same number of cars being delivered over a six month period, but without the extra costs involved.
Despite the ongoing semiconductor and general parts supply challenges, Tesla is on track to deliver around 900,000 cars in 2021.
Here is a full copy of the email.
Per my email several weeks ago, our focus this quarter should be on minimizing *cost* of deliveries, rather than spending heavily on expedite fees, overtime and temporary contractors just so that cars arrive in Q4.
What has happened historically is that we sprint like crazy at end of quarter to maximize deliveries, but then deliveries drop massively in the first few weeks of the quarter. In effect, looked at over a six month period, we won’t have delivered any extra cars, but we would have spent a lot of extra money and burned ourselves out to accelerate deliveries in the last two weeks of each quarter!
We will still have quite a big wave of deliveries in the last few weeks of December, as we don’t yet have high volume production in Europe or Texas, which means a lot of cars on boats from China to Europe and on trucks/rail from California to the east coast arriving late in the quarter, but this is nonetheless the right time to start reducing the size of the wave in favor of a steadider and more efficient pace of deliveries. The right principle is: take the most efficient action, as though we were not publicly traded and the notion of “end of quarter” didn’t exist.