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But in an email to employees, Musk acknowledged that Tesla’s actual profit margin is quite low, only around 1%, and that the stock price is due to investors’ expectations for future earnings rather than recent results.
“If at some point they conclude that this will not happen, our broth will immediately be crushed like a souffle under a sledgehammer!” he wrote in the email, which was first reported by Electrek. Tesla did not respond to a request for comment on the email.
The email primarily focused on the importance of finding savings, however small, in the car building process.
“This is a tough game – requiring thousands of great ideas to improve the cost of parts, a factory process, or just the design, all while increasing quality and capabilities,” Musk writes. “A great idea would be one that saves $ 5, but the vast majority are 50 cents here or 20 cents there.”
As Tesla has emerged as the leader in electric cars, all major automakers are making major efforts to build more electric vehicles. General Motors (GM) has announced plans to switch to nothing but electric vehicles and expects 40% of cars sold to be electric within five years. Part of the incentive is that electric vehicles can be cheaper to build because they have fewer moving parts than gasoline vehicles.
In separate comments on Tuesday, Musk reiterated a statement he made earlier that Tesla’s stock price was “too high.”
“I even said the stock was too high. I mean what I’m supposed to do,” he said, rolling his eyes during an interview with Mathias Doepfner, CEO of the tech company and Axel Springer Media Center. Musk was responding to the fact that Tesla is worth more than five times what Volkswagen (VLKAF), the world’s largest automaker in terms of sales.
Doepfner asked if Musk would consider using Tesla’s high share price to buy an established automaker and while Musk has said he’s not looking to do so, he won’t rule it out.
“We are certainly not going to launch a hostile takeover,” he said. “If somebody were to say, ‘Hey, we think it would be a good idea to merge with Tesla,’ we would definitely have this conversation.”
Musk’s full interview with Doepfner was posted on YouTube.
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