Elon Musk reveals how Tesla plans to increase profits

Tesla (NASDAQ: TSLA) was one of the undisputed winners of 2020 and achieved a whopping 743% for the year. This momentum continued until 2021, with inventories already rising more than 12%. The mysterious founder of the company, Elon Musk, admits that shareholders give Tesla a lot of credit from future profits.

On this episode of Nar Live aired on December 2, 2020, The Hall’s host Jason Hall and Fool.com contributor Danny Vena discuss how Musk plans to get there.

Jason Hall: Danny Vena, you’re trying to talk about EVs and share some knowledge of Elon Musk with us.

Danny Vena: Well, since we are talking about smarter, happier and richer. This is a case where I own Tesla shares. So it makes me smarter, happier and richer.

Tesla was already one of the undisputed winners in 2020. The last time I checked it, the stock has increased about 560 percent so far this year. There were many factors that played into it. The company announced ambitious production targets at the beginning of the year. They maintained these goals even through the pandemic. There was a stock split that attracted many Robinhood investors. The whole fear of missing something. When the stock ran out, people jumped on board because they were afraid they would miss it.

Tesla recently announced its fifth consecutive quarter of profitability. Of course, the word is that the stock would be included in the S&P 500, which I now understand, will all be done in one section and will happen on December 21st. I think originally, they talked about splitting up and now they are going to do everything at once.

The biggest winner of Tesla’s breathtaking run this year was, of course, Elon Musk. Late last month it was reported that he had overtaken Bill Gates to become the second richest person in the world and that he was worth about $ 128 billion. This puts him right behind the Amazon CEO Jeff Bezos, whose net worth is about $ 180 billion.

Now, Musk recently sent an email to his employees that was discovered yesterday. In essence, what he said is that the business is going to start focusing on profit. He told his employees in the email: “If we look at our actual profitability, it has been very low at around 1% over the past year. Investors give us a lot of credit for future profits, but if at any point they deduce it it’s not going to happen, our stock is immediately smashed like a soufflé under a sledgehammer! “

Then he said how they could achieve more profitability. If we say it was a penny game, “which requires thousands of good ideas to improve a part cost, factory processes or simply the design. … A good idea would save $ 5, but the vast majority of ideas are going save $ 0.50 or $ 0.20 here. ‘

So based on the email, it looks like Elon Musk is going to have a bigger eye on profitability for Tesla, and that’s good for Tesla shareholders, of which I’m one.