Tesla Inc. shares slid to their lowest close in almost 2½ years Friday after Elon Musk called for a “hardcore” review of all the electric-car maker’s expenses and an analyst warned of potentially severe fallout from a fatal crash involving Autopilot.
Musk, Tesla’s chief executive, wrote in an email to staff late Thursday that he and new Chief Financial Officer Zachary Kirkhorn will review “literally every payment” that leaves the company’s coffers to confirm that expenditures are critical.
Musk referred to Tesla losing $700 million in the first quarter, and said that while the company raised about $2.4 billion in capital recently, that wouldn’t last long at the rate the company was burning through money early this year.
The carmaker’s share price finished the day at $211.03, down 7.5%, its lowest close since December 2016. The shares are now down 36% so far this year.
The email is similar to a message Musk, 47, sent to employees in April 2018, when he announced he had asked Tesla’s finance team to “comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification.”
As was the case a little over a year ago, Tesla is also dealing with criticism of Autopilot following the death of a customer using the driver-assistance system. After the National Transportation Safety Board linked Autopilot to a fatal crash in March, Consumer Reports called for Tesla to make immediate changes to restrict drivers from using the system in unsafe conditions and said the company needed to more effectively monitor driver engagement.
“The eventual outcome of this investigation may have severe ramifications,” Arndt Ellinghorst, an analyst at Evercore ISI, said in a note Friday. The analyst said that if Tesla were to be required to recall or shutter Autopilot until the system is modified and validated, sales would drop, sentiment would worsen and liabilities would increase.