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Musk Asks Tesla Workers To Prioritize Lower Delivery-charges Over Super-fast Production

Elon Musk the CEO of EV giant, Tesla Inc. (TSLA) has reportedly asked the employees to concentrate on reducing the cost of delivery instead of working like "crazy" to finish the cars to get them delivered by the fourth quarter.

The demand for electric vehicles has skyrocketed in the last 18 months and Tesla has been one of the biggest beneficiaries. But despite having acquired the experience of making cars, the company has been having a tough time keeping up with the orders. This Christmas, the company is focusing on cutting delivery costs, possibly leaving fourth-quarter sales targets second in the priority list.

In a memo distributed to the employees on Friday, Musk said, "What has happened historically is that we sprint like crazy at end of the quarter to maximize deliveries, but then deliveries drop massively in the first few weeks of the next quarter. In effect, looked at over a six month period, we won't have delivered any extra cars but we will have spent a lot of money and burned ourselves out to accelerate deliveries in the last two weeks of each quarter."

The richest man in the world, then followed it up on Monday when he referred to the fourth-quarter delivery push to as "still be very intense, just slightly less than in the past." Musk said that the company spends a lot of money on "expedite fees, overtime, and temporary contractors just so that cars arrive in Q4."

Tesla has already delivered more than 627, 000 cars in the first three quarters of 2021 and would want to improve the delivery by 50% in the following year. The company also delivered a staggering 241,000 cars in the third quarter, when the world is suffering from supply chain shortages.

Due to a global chip shortage, some of the Tesla cars have missed some parts like USB ports. Musk also said in a very recent memo that there will be a new wave of shipments to hit the east coast of the US and Europe in December but has asked the workers to concentrate on the process, "in favor of a steadier and more efficient pace of deliveries."

"The right principle is to take the most efficient action, as though we were not publicly traded and the notion of 'end of quarter' didn't exist," he wrote.

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