Tesla’s stock is up nearly sixfold this year, and that makes Elon Musk nervous.
The electric automaker’s CEO has told employees that the company must focus on its profit margins lest investors turn their backs on the shares.
“Investors are giving us a lot of credit for future profits,” Musk said in an email obtained by Tesla blog Electrek. “But if, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!”
Musk noted that Tesla — which recently achieved its fifth-consecutive quarter without a loss — has an “actual profitability” of just over 1 percent over the past year. The company has relied on income from the regulatory credits it sells to other automakers to keep it in the black.
The 49-year-old executive, who has added more than $100 billion to his net worth thanks to Tesla’s stock surge and who is now the second-richest man in the world, called Tesla’s profit push “a tough Game of Pennies” where new ideas will be needed “to improve part cost, a factory process or simply the design.”
“A great idea would be one that saves $5, but the vast majority are 50 cents here or 20 cents there,” Musk said.
Musk in September pledged that Tesla would sell a “fully autonomous” vehicle for $25,000 by 2023. Tesla’s current cheapest car, the Model 3, starts at $36,490.
Also on Tuesday, Musk made headlines at an Axel Springer event in Berlin by saying he would be open to discussing a possible merger with another automaker.
Musk was asked whether Tesla would look to acquire any of its rivals now that it is worth more than $500 billion, but the CEO said he would prefer a partnership.
“We are definitely not going to launch a hostile takeover,” Musk said. “If somebody said it would be a good idea to merge with Tesla, we would have this conversation.”
Tesla shares were up 2.5 percent Tuesday afternoon, at $581.65.
A Global Asset Management Seoul Korea Magazine