> A lot of FUD from the media said Elon stated they will only have 10 months left before cash balance is zero. No where in this letter stated such a thing and Elon just used an arbitrary number(in this case the newly raised capital) to express the point that 2.4 billion may seem like a lot of money, but we shouldn't take it for granted. In fact their cash balance is most likely over 4 billion.
> This letter to me shows the maturity of a company. Elon is telling his team that just because I can raise 2.4 billion whenever I want doesn't mean money is falling from the sky. Everyone must continue to be vigilant about cost cutting, and we must prove to our investors that we will take cost cutting seriously.
> From Q1 conference call, Elon alluded that the reason why he is against raising capital all the time is because he wants to focus on cost cutting as the primary objective. So his letter does not seem anything out of the ordinary. > So no, the sky is not falling.
> https://www.reddit.com/r/teslamotors/comments/bq50s8/elons_a...
So it sounds to me that Elon musk does not want Tesla to burn money like Uber. He says they most certainly could, but he would rather focus on cost cutting. This seems to be a very mature reaction, something every mature company does. This makes Tesla less and less like a startup and more like a mature company. Granted, they are not there yet but I believe they could be there very soon.
Elon Musk also always makes things “hardcore”, or more extreme then a normal company would do. Instead of cost cutting over years, he wants it done fast but might underestimate the time it actually takes to achieve his goal. We have seen that move from him many times, when a released the model 3, he gave a very very optimistic release timeline. While he missed it, it was still a lot faster then his original plan to release it in 2020 and still faster then a lot people estimated. While this doesn’t always work out (like his autopilot goals), by setting such hard goals and deadlines, things move much faster then they normally would. Only time can tell if his cost cutting plan actually works but he has shown that such extreme actions can often lead to much better results because everyone wakes up and doesn’t just put it on goals for the next 3 to 5 years list.
That being said, I am not really worried about Tesla. They have shown that they are able to get a lot more money if necessary and their demand is still going strong. The competition doesn’t look very promising (the audi E-Tron is often compared to the 2013 model S, and while it is most certainly superior in some aspects, I believe Tesla is still a few years ahead from the competition).