[Introduction]: Recently, Tesla continued to report the news of bankruptcy. Even Apple said that it would acquire Tesla. Although these are rumors, but the hole is not coming, Tesla is indeed facing internal and external problems. Musk also announced yesterday that Tesla will be majorly reorganized. I wonder if this will improve the capacity of model3.
Tesla CEO Eron Musk told employees on Monday that the plan is to "flatten" the company's structure to improve internal communication and streamline activities that are "not important to the company's success."
In the memo, Musk said: "To ensure that Tesla is ready for the future, we have been completely reorganizing the company. As part of the restructuring, we are flattening the management structure to improve communication and consolidation. Some important features that reduce activities that are not important to the success of our mission. It is important to be clear that we will continue to quickly recruit relevant talent for key positions to support Model 3 to overcome 'production ramps' and future product development."
When CNBC asked for an interview, Tesla declined to comment.
In the Nasdaq regular trading on Monday, Tesla shares closed at $291.97, down nearly 3.02% from the previous trading day.
In early May of this year, at the analyst conference call after the release of the first quarter of 2018, Musk warned that Tesla would make some adjustments to improve its financial situation. Tesla has consumed billions of dollars in cash, and some analysts believe that the company will need to refinance in early 2019.
At the meeting, Musk said: "We will carry out some restructuring this month to adjust the company structure to ensure that we are ready to achieve the set goals."
He said: "In particular, the number of third-party contracting companies we use is really out of control, so we have to clear some 'vines' in this area. It's really crazy, there are vines on the vines. For this, there will be Many vines are cleared."
At the end of March this year, credit rating agency Moody's lowered Tesla's credit rating and lowered its rating outlook from stable to negative.
In the first quarter of this year, Tesla's cash income was $2.7 billion, down from $3.4 billion at the end of 2017. Efraim Levy, an analyst at market research firm CFRA Research, told CNBC that he needs to invest in the business and need to repay debt. He expects Tesla to have about 45 in the next two years. A shortage of funds of 100 million US dollars.
This is not the first time Musk has expressed his desire to take streamlined measures against Tesla. Before the first-quarter earnings report, a leaked e-mail showed that the company would take more stringent measures on spending, including relationships with suppliers and contractors.
So, what difficulties does Tesla currently face?
Tesla is losing top talentTesla needs good morale to help it achieve its production goals for the Model 3 electric car, but at this critical time, the company is losing a lot of top talent.
In the past seven months, Tesla has lost at least nine executive-level employees or higher, and one executive is on vacation.
These executives include:
Doug Field, vice president of senior engineering at the company, is also the company's chief automotive engineer. He was announced to be on vacation last Friday.
Matthew Schwall, director of the company's Field Performance Engineering, is also the primary technical liaison for Tesla and US security investigators.
Eric Branderiz, chief accounting officer and chief financial officer of the company.
Susan Repo, Treasurer and Vice President of Finance.
Jim Keller, head of the company's driver assistance system Autopilot.
Jon McNeill, president of the company's global sales, marketing, delivery and services.
Celina Mikolajczak, Senior Manager of Battery Technology, Battery Quality and Materials Analysis.
Jon Wagner, senior director of battery engineering at the company.
William Donnelly, Vice President of Global Financial Services and President of Tesla Finance.
Jeff Evanson, vice president of global investor relations.
Regulatory reviewDue to a traffic accident in its electric car, Tesla is facing four investigations by federal regulators. The survey was conducted to assess whether Tesla's battery technology or Autopilot caused these accidents.
Its relationship with regulators has been undermined in recent months. In April of this year, the National Transportation Safety Board (NTSB) “revoked†the “investigator†status of Tesla’s investigation into death traffic accidents involving the launch of Tesla Model X and Autopilot.
Recently, the US Highway Traffic Safety Administration (NHTSA) refuted Tesla's statement. Tesla had previously said that NHTSA found that its Autopilot technology drastically reduced traffic accidents, but the agency denied it, saying it never really tested the effectiveness of Autopilot.
Tesla is showing signs of financial distress.
At the end of 2017, the company had $3.4 billion in cash reserves and $9.4 billion in outstanding debt. These debts are about to expire, and Tesla needs more money to increase Model 3 production and start developing new products including the new generation Roadster, Model Y and electric truck Semi.
In its first quarter earnings conference call, Musk said: "In addition to the standard credit line, Tesla does not need equity or debt financing this year."
But financial columnist Jim Collins recently pointed out that Tesla is taking steps that are unusual for companies with good financial positions, including creating a special purpose entity for certain debts, and The Fremont factory provides a guarantee.
In addition, Moody's recently downgraded Tesla's credit rating and lowered its rating outlook from stable to negative, on the grounds that Model 3's production and financial conditions were “seriously inadequateâ€.
Model 3 production "bottleneck"
For Tesla, when to implement Model 3 efficient, high-volume production has always been a question mark. Model 3 is Tesla's first electric car for the mass market. In many ways, the future of the company depends on the success of the car.
Previously, Tesla's goal was to produce 2,500 Model 3 cars a week before the end of the first quarter of this year, but ultimately failed to achieve this goal. The company is currently committed to achieving the goal of producing 5,000 Model 3 cars per week by the end of the second quarter – a goal that the company has promised to achieve in 2017.
Model3's mass production goal has not been realized, the problems of factory recognition and automation equipment are becoming more and more tense, and external suppliers are lax. It seems that Tesla is somewhat disappointed. In the face of such internal and external problems, Tesla's road ahead Seeing ambiguity, perhaps restructuring can improve the current status quo.
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