By Erkan Nasirli
Science & Technology Editor
Tesla may seem like a profitable company, however, that is the exact opposite of what’s happening to the company.
At the moment, Tesla is receiving serious subsidies from the United States government, for example in Q3 of 2018 Tesla received $713 million USD from the United States government. Meanwhile, the profit is only a mere $312 million USD.
This brings us to today, with Musk saying that the company will run out of money in 10 months unless “hardcore” changes are made. This is surprising considering the fact that Tesla raised $2.7 billion USD this month. According to Musk, the company needs to cut costs in order to be more profitable.
The issue is that Tesla lost a staggering $702 million USD at the end of Q1 of 2019.
For Musk this doesn’t come as a surprise because over a year ago an email was sent to cut all costs of the company no matter how small as long as it didn’t bring substantial value, it was cut.
This is bad for the company because cutting costs will lead to a decrease in the quality of both products and services.
Just last June the company fired 9% of its workforce. Musk mentioned in an email that he was “making this hard decision now so that we never have to do this again.” But that wasn’t enough, in January, the company fired another 7% of their workforce. Musk doesn’t expect the company to profitable in Q2 of 2019 either.
Some may think that Tesla’s situation can’t get any worse, but just this month a 50-year-old man died on a Florida highway possibly as a result of his Tesla’s faulty autopilot. Whether the crash is Tesla’s fault or not, it definitely isn’t good publicity at a time like this.
Some may argue that the increase in electrical vehicles from other companies creates competition that Tesla can’t survive, so perhaps now is a good time for Elon Musk to give up on Tesla.