Tesla CEO Elon Musk sent an e-mail to employees on Tuesday warning them that they need to control their spending in order to continue squeaking out quarterly profits, even though shares of Tesla are trading at all-time highs ahead of the company’s inclusion in the S&P 500.
This year, among other things, Tesla began spending to build a new factory near Austin, Texas, and another near Berlin. The company also embarked on a makeover of its paint facilities, which are part of its U.S. vehicle assembly plant in Fremont, California.
“Investors are giving us a lot of credit for future profitability but if, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a souffle under a sledgehammer!” Musk wrote in the email, which was obtained by CNBC.
Electric vehicle news site Electrek previously reported the contents of Musk’s email.
In early 2020, amid sluggish auto sales the world over, Tesla cut some employees’ pay temporarily, slashed contracts with temporary workers and fired an undisclosed number of workers after an annual performance review process. It has since rehired contractors and restored employee pay.
The Tuesday e-mail echoes previous statements by Musk but does not specify how Tesla plans to mind its budget.
On the company’s third-quarter earnings call, Musk told analysts and shareholders, “We’re trying to spend money at the fastest rate that we can possibly spend it and not waste it.”
But on that same call, Tesla CFO Zachary Kirkhorn said Tesla plans to ramp up its capital expenditures by $2 billion versus its prior stated plans to $2.5 billion in 2021 and 2022. Among other things, he said, the increased spending would enable Tesla to “in-source” things like some of its battery cell manufacturing.
Tesla raised $5 billion in September through an equity raise but needs to pay down about $1 billion in this, its fourth, quarter related to converts.
Shares of Tesla were trading above $580 ahead of the market’s close on Tuesday.