Tesla, Inc. TSLA typically does a "quarter-end push" to achieve delivery targets, and its CEO Elon Musk has a habit of sending internal memo to motivate employees to accomplish this objective.
What Happened: This time around, Musk has urged employees to explore ways of reducing the cost of delivering vehicles in the fourth quarter instead of rushing to hit end-of the-quarter sales goals, CNBC reported, citing an email from Musk to Tesla workers.
"Per my email several weeks ago, our focus this quarter should be on minimizing cost of deliveries rather than spending heavily on expedite fees, overtime and temporary contractors just so that cars arrive in Q4," Musk said in the email.
In hindsight, the mad rush to maximize deliveries has served only to increase money spent on accelerating sales in the last two weeks of each quarter without delivering any extra cars, he added.
Related Link: Tesla Withdraws Application For $1.3B In German Subsidies
Musk also said the company has a lot of cars being exported from China to Europe and trucked or transported on rail from California to the East Coast, given volume production hasn't started yet in Europe or Texas.
Nevertheless, the Tesla chief believes it is the right time to start "reducing the size of the wave in favor of a steadier and more efficient pace of deliveries."
"The right principle is take the most efficient action, as though we were not publicly-traded and the notion of "end of quarter" didn't exist," Musk concluded.
Why It's Important: Musk's stance comes against the backdrop of supply chain challenges. Automakers are severely constrained by shortages of chips and components.
For Tesla, in particular, lead times for vehicle deliveries have lengthened, resulting in long wait times for customers.
"Tesla is facing a "high class" problem of demand outstripping supply, especially for Model Ys and Model 3s, across the globe," Wedbush analyst Daniel Ives said in a recent note.
Tesla closed Friday's session down 3.05% at $1,081.92.
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