And that's factoring in Tesla's recent $2.3 billion cash infusion.
Of the many unique attributes that make Tesla so interesting to follow, it's the pace at which things move at the company that seems to stand out the most. As part Silicon Valley startup and part automaker, Tesla's speed means it operates similar to how Facebook did when its ethos was "move fast and break things." And when you combine that speed with the constant state of precarity Tesla seems to find itself in, you get drastic moves more focused on short-term survival than on long-term growth.
It's why Tesla CEO Elon Musk was recently heard talking about the possibility of offering a car insurance product, right after the automaker got done raising another $2.3 billion by issuing bonds and stocks after its first-quarter financial report of 2019 put it on track for bankruptcy. But according to Reuters, Musk sent an email to employees on Thursday informing them that this latest round of funding only gives the automaker another ten months to achieve a break-even point.
And that ten-month estimate assumes Tesla will continue to burn cash at the rate it was during its first quarter, which may be tough to do considering the automaker has the cost of designing, engineering, and producing the upcoming Model Y crossover to factor in - without even mentioning the "production hell" Tesla went through to get the Model 3 on the road.
That leaves Tesla with two ways to stay alive: to increase sales and to cut costs in order to bring the company out of the red and into the black. There isn't much Tesla can do on the sales front except for continuing to offer the best product it can and get the Model Y to market quickly, so that leaves cutting costs. As an engineer at heart, Musk is obsessed with efficiency, which is why he told employees in the same email that Tesla was going to review everything it was spending money on and figure out where it could afford to cut costs.
And by everything, we really do mean everything. "That is why, going forward, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed," Musk said in the email. Lest you forget, Tesla cut around 7% of its workforce this January to slim down the company and divert cash to the Model 3 production line. Whatever is left from Musk's latest cost-cutting tirade will only go down in the books as another of the many drastic moves Tesla takes to stay alive.