Read the email Elon Musk sent to Tesla workers about reducing shipping costs

Tesla Model Y compact crossover car at a showroom in Shanghai, China, January 18, 2021.

VCG | Visual China Group | Getty Images

Tesla CEO Elon Musk said in a company-wide email received by CNBC as port restrictions continue and shipping costs rise, the cost of delivering an electric vehicle to customers rather than rushing to order at the last minute. Encouraged employees to look for ways to reduce. To reach the end-of-quarter sales target.

This year, Tesla struggled to deliver new cars to US customers in line with the originally promised date range. As CNBC previously reported, some Tesla customers here experienced months of delivery delays, took rental and ride-hailing app payments out of their pockets, and re-loans due to overdue. I had to apply.

Tesla isn’t the only one waiting customers longer than expected for a new, fully electric vehicle. For example, last week, a new public rival, Rivian Automotive, notified people who booked the sports utility vehicle R1S of a delivery delay.

Still, Tesla’s sales don’t seem to yield to unpredictable deadlines, but they’re growing this year.

In 2020, Elon Musk’s electric vehicle and renewable energy business delivered vehicles that were closest to the reported sales, reaching a total of approximately 500,000 units. In the first three quarters of 2021, Tesla has already reported the delivery of 627,350 vehicles.

Since its inception in 2021, the company has not provided a clear goal for 2021 vehicle delivery. However, Tesla has repeated loose guidance on “average annual growth of vehicle delivery of 50%” over multiple years, including the announcement of financial results for the third quarter.

Junheng Li, CEO and Head of Research at JL Warren Capital, said in a note to investors last week that Tesla’s sales are expected to continue to grow, at least in China this quarter. “Rising gas prices will benefit all new energy vehicle brands,” she said.

According to a Canalys survey, about 1.3 million electric vehicles were sold in China in 2020. The company predicts that EV sales in China will increase to 1.9 million units by the end of this year.

China remains the world’s largest new car market, with strong government support for electric vehicles.

This is the complete email that Elon Musk sent to all Tesla employees on Friday (posted by CNBC).

From: Elon Musk


Subject Fourth Quarter Delivery and Cost Efficiency

Date: November 26, 2021 [time stamp redacted]

According to my email a few weeks ago, the focus for this quarter should be on minimization. cost Delivery instead of spending a lot of money on quick rates, overtime, and temporary contractors so that the car arrives in the fourth quarter

What has historically happened is to sprint crazy at the end of the quarter to maximize delivery, but then delivery will drop significantly in the first few weeks of the next quarter. In fact, over a period of 6 months or more, no additional cars were delivered, but in the last two weeks of each quarter we spent a lot of money burning down to accelerate delivery.

There is still a pretty big wave of deliveries in the last few weeks of December, as neither Europe nor Texas has yet been mass-produced. In other words, many cars are on boats and trucks from China to Europe. [and/or] Railroads from California to the East Coast arrive later in the quarter, but it’s still a good time to start reducing the size of the waves, prioritizing a more stable and more efficient delivery pace.

The right principle is to act most efficiently as if we weren’t listed and the concept of “end of quarter” didn’t exist.

Thank you,

Read the email Elon Musk sent to Tesla workers about reducing shipping costs

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