Elon Musk tells Tesla employees to stop rushing to increase quarterly deliveries

Illustration by Alex Castro / The Verge

In a latest memo, Tesla CEO Elon Musk has instructed the corporate’s employees to not dash to make deliveries by the top of this quarter, and to as an alternative give attention to minimizing prices, CNBC reports. In the November twenty sixth memo, Musk wrote that he doesn’t need the corporate “spending closely on expedite charges, additional time and momentary contractors simply in order that automobiles arrive in This autumn.”

“What has occurred traditionally is that we dash like loopy at finish of quarter to maximize deliveries, however then deliveries drop massively within the first few weeks of the following quarter,” stated Musk. “In impact, checked out over a six month interval, we gained’t have delivered any further automobiles however we can have spent a number of money and burned ourselves out to speed up deliveries within the final two weeks of every quarter.”

The memo was despatched just a little over a month after Tesla was ready to increase its international deliveries to over 241,000 in its latest quarter, regardless of international provide chain points and a chip scarcity that’s hit gross sales from different automakers like General Motors and Ford. CNBC notes that Tesla hasn’t launched a transparent delivery goal for 2021, however that it loosely goals to increase deliveries by round 50 % on an annual foundation. It delivered 500,000 autos in 2020, and has already reported delivering 627,350 within the first three quarters of 2021. In this context, it appears like there’s much less of a necessity for Tesla to rush to hit its targets.

That’s not to say that Tesla hasn’t confronted any delivery challenges this 12 months. In August, CNBC reported that some prospects had seen their automobiles delayed by weeks or months due to elements shortages and manufacturing challenges at its Fremont plant. There have been additionally stories this month of delivered automobiles lacking options like USB ports, apparently because of the worldwide chip scarcity.

Electrek notes that this may occasionally not have been the primary time Musk has instructed employees to give attention to prices over delivery targets, however that the apply has nonetheless persevered throughout the firm. This reportedly creates intense end-of-quarter pressures at Tesla, will increase prices, and may lead to prospects being rushed to take delivery of their automobiles.

In his latest memo, Musk goes on to say that the corporate is anticipating to expertise a big delivery wave on the finish of December, as shipments from California and China attain the east coast of the US and Europe respectively. But the CEO needs to cut back the size of those waves sooner or later, “in favor of a steadier and extra environment friendly tempo of deliveries.”

“The proper precept is take essentially the most environment friendly motion, as if we weren’t publicly-traded and the notion of ‘finish of quarter’ didn’t exist,” he wrote.

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