Elon Musk is that entrepreneur who is famous for building innovative startups like SpaceX, Tesla, The boring company. However, according to recent reports, the situation for Elon Musk might be going hard because it’s been observed that Musk in his last email to employees stated that Tesla might be running out of cash in next ten months. Reports show Musk mentioned the financial condition of Tesla to its employees in one of his recent emails. Musk wrote this email after the company recently released its first-quarter earnings reports which don’t sound right. Tesla currently has $2.2 Billion of cash reserves, which is not enough for producing more vehicles and that’ the reason executives had to borrow funds of $2.7 billion to further running company.
Last quarter was not suitable for the company because it booked $702 million of huge losses. Musk mentioned that having billions already in cash reserves might sound enough, but it’s not. Tesla needs to finish up its production target pretty soon, and to achieve that it will have to burn lots of cash reserves. A few days ago, Tesla decided to lay off some of its employees because executives wanted to save money by cutting its workforce.
Even though in 2018 Tesla managed to booked consecutive two-quarters of profit, it’s not enough. The company has gone through many controversial phases because there was a rumor that Elon Musk is trying to take the company private with the help of Saudi investors. Elon further mentions that all kinds of expenses like travel, salary, rent need to be reviewed because the company’s overheads have now crossed the limits. However, this is not the first time when Tesla has gone through such situations because earlier also there were chances of bankruptcy and company successfully pulled it off.