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Tesla CEO Elon Musk is telling his employees they need to cut costs or they can say goodbye to the high stock price.

Tesla shares have been among the top performers in 2020, rising nearly 600 percent through Tuesday’s trading, making it one of the most valuable stocks in the country, priced higher than any automaker. important.

After years of losses, Tesla has reported five consecutive quarters of positive net income.

Tesla CEO Elon Musk surpassed Warren Buffett on the Bloomberg Billionaires Index to become the world's seventh richest person.
Tesla CEO Elon Musk surpassed Warren Buffett on the Bloomberg Billionaires Index to become the world’s seventh richest person. (Yasin Ozturk / Anadolu Agency / Getty Images)

But in an email to employees, Musk acknowledged that Tesla’s actual profit margin is quite low, only about one percent, and that the share price is due to investors’ expectations of future earnings rather than to recent results.

“If, at some point, they conclude that this is not going to happen, our stocks will immediately be crushed like a souffle under a mallet,” he wrote in the email, which was first reported by Electrek.

Tesla did not respond to a request for comment on the email.

The email primarily focused on the importance of finding even small cost savings in the car building process.

Tesla CEO Elon Musk says saving costs is a must. (AP / AAP)

“This is a tough penny game, requiring thousands of good ideas to improve the cost of parts, a factory process, or just the design, while increasing quality and capabilities,” Musk wrote.

“A great idea would be one that saves $ 5, but the vast majority is 50 cents here or 20 cents there.”

While Tesla has become the leader in electric cars, all the major automakers are going to great lengths to build more electric vehicles.

A truck loaded with Tesla cars leaves the Tesla plant. (AP / AAP)

General Motors has announced plans to switch to electric vehicles and expects 40 percent of the cars it sells to be electric within five years.

Part of the incentive is that electric vehicles can be cheaper to build because they have fewer moving parts than gasoline-powered vehicles.

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In separate comments Tuesday, Musk repeated a statement he had previously made that Tesla’s stock price is “too high.”

“I even said the action was too high. I mean what am I supposed to do,” he said, rolling his eyes during an interview with Mathias Doepfner, CEO of technology and media company Axel Springer.

Tesla shares have soared as a result of several positive quarters. (CarAdvice)

Musk was responding to the fact that Tesla is worth more than five times more than Volkswagen, the world’s largest automaker in terms of sales.

Doepfner asked if Musk would consider using Tesla’s high stock price to buy an established automaker, and while Musk said he’s not looking to do that, he wouldn’t rule it out.

“We are definitely not going to launch a hostile takeover,” he said.

“If someone said, ‘Hey, we think it would be a good idea to merge with Tesla,’ we would certainly have that conversation.”


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