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Tesla hits a 2-year low as Musk adopts 'hardcore' focus on costs
TESLA INC shares headed for their lowest close in almost 21/2 years after chief executive Elon Musk called for a "hardcore" review of all the electric-carmaker's expenses, while an analyst warned of potentially severe fallout from a fatal crash involving Autopilot.
Mr Musk, 47, wrote in an email to staff late on Thursday that he and new chief financial officer Zachary Kirkhorn will review "literally every payment" that leaves the company's coffers to confirm that expenditures are critical.
Mr Musk referred to Tesla losing US$700 million in the first quarter, and said that while the company raised about US$2.4 billion in capital recently, it won't last long at the rate the company was burning through money early this year.
The carmaker's shares dropped 6.7 per cent to US$212.95 on Friday in New York, headed for the lowest close since December 2016.
The email is similar to a missive Mr Musk sent to employees in April 2018, when he announced having asked Tesla's finance team to "comb through every expense worldwide, no matter how small, and cut everything that doesn't have a strong value justification".
As was the case a little over a year ago, Tesla is also dealing with criticism of Autopilot, following the death of a customer using the driver-assistance system.
After the National Transportation Safety Board linked Autopilot to a fatal crash in March, Consumer Reports called for Tesla to make immediate changes to restrict drivers from using the system in unsafe conditions, and said the company needs to more effectively monitor driver engagement.
"The eventual outcome of this investigation may have severe ramifications," Arndt Ellinghorst, an analyst at Evercore ISI, said on Friday. Friday's slump of as much as 7.2 per cent brought the decline for Tesla shares this year to 36 per cent. BLOOMBERG