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Musk Urges Tesla Staff to Watch Costs, Keep Cool on Deliveries

'Our focus this quarter should be on minimizing cost of deliveries rather than spending heavily ... just so that cars arrive in Q4,' he said.
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You wouldn’t normally expect the name Elon Musk and cost consciousness to appear in the same sentence.

But in an email to employees Friday obtained by several media outlets, the Tesla  (TSLA) - Get Tesla Inc Report CEO warned his workers to restrain year-end spending and quell the urge to rush deliveries.

The news helped push Tesla shares up 4% to $1,125 Monday, well above the Nasdaq Composite’s 1% gain.

“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 next quarter

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“In effect, looked at over a six month period, 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 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 either in Europe or Texas.

That “means a lot of cars on boats from China to Europe and on trucks [and/or] 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 steadier 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.”