Elon Musk, chief executive of electric car maker Tesla on Tuesday, warned in an internal email that if investors start to worry about Tesla's ability to meet its earnings expectations, the company's rising stock price could be "hit hard.".

In an email on Tuesday, musk urged all employees to remain focused on cutting operating costs to prevent a reversal of Tesla's soaring share price. Tesla is working to deliver 500000 vehicles this year.

"In terms of actual profitability, last year's profit margin was very low, only about 1 percent," Musk wrote in an email. Investors have put a lot of trust in our future profitability. But as soon as they decide it won't happen, our shares will be as vulnerable as custard under a heavy hammer! "

Tesla did not respond to a request for comment.

Tesla's share price has soared nearly 600% this year, in part because it has been waiting for the company to become a component of the S & P 500 index and has made profits for the fifth consecutive quarter to October. Musk and chief financial officer Zachary kirkhorn have been focusing on cost reduction for several quarters. At the same time, Tesla has begun to invest billions of dollars in new plants near Austin, Texas and Berlin to expand global capacity and sales.

"At a time like this, when our stocks keep hitting new highs, some people may think that being frugal doesn't seem to matter. This is absolutely not true Musk stressed in an email.

With the growth of Tesla automobile sales, the affordability of consumers has become a more and more concerned problem of musk. Musk has said he is willing to sacrifice profits to sell more and cheaper electric cars. It also promised a $25000 model by 2023. Tesla's cheapest model right now is the model 3, which starts at $37990.

"More importantly, in order to make our cars affordable to more people, we have to be more economical." "It's a tough game, requiring countless innovative ideas to reduce parts costs, simplify plant processes or product design, and improve quality and efficiency," Musk wrote "A good idea would be to save $5 directly, but in most cases it's $0.50 here and $0.20 there."

Musk also won an innovation award from German publisher Axel Springer Se in Berlin on Tuesday. The award was given to other U.S. billionaire entrepreneurs such as Amazon CEO Jeff Bezos and Facebook CEO Mark Zuckerberg.

At the awards ceremony, musk was asked if Tesla would consider buying another automaker. Musk directly ruled out the possibility of the current one, but said any future deal would have to be agreed by both sides. "We will never launch a hostile takeover," he said. "If someone says, hey, we think it's a good idea to merge with Tesla, we'll definitely have a conversation."

Tesla is building its first European Super factory near the German capital Berlin in a major blow to the local auto industry. Musk, who is trying to push the Berlin super factory project into operation by July next year, said he might spend the night in the unfinished factory conference room.

"When the Berlin super factory opens, we have a big celebration," he said (Chen Chen)

Source: Netease technology report, translated by Baidu