Musk tells staff to cut cost of delivering Tesla vehicles

Tesla CEO Elon Musk. (File photo: IANS)

San Francisco, Nov 29 (IANS) Tesla CEO Elon Musk has urged employees not to be in a hurry to deliver vehicles in the ongoing festive quarter but focus on minimising costs, becase he doesn’t want the company “spending heavily on expedite fees, overtime and temporary contractors just so that cars arrive in Q4.”

Tesla has generally ramped up deliveries of cars to customers at the end of each quarter.

In a memo to employees seen by CNBC, the Tesla CEO said that 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”.

“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,” he wrote.

The memo was sent after Tesla was able to increase its global deliveries to over 241,000 in its latest quarter, despite supply chain issues and chip shortage.

According to the report, Tesla hasn’t released a clear delivery target for 2021, but that it aims to increase deliveries by around 50 per cent on an annual basis.

Tesla has reiterated its guidance for “50% average annual growth in vehicle deliveries” over a multi-year horizon, including on its third-quarter earnings call.

The electric car-maker delivered 500,000 vehicles in 2020, and has already reported delivering 627,350 in the first three quarters of 2021.

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