Outlining a "comprehensive set of upgrades" to improve production capacity, he also addressed the "fair criticism levelled at Tesla" that it had so far failed to turn a profit.
"It didn't make sense to do that until reaching economies of scale, but now we are there," he said.
"Going forward, we will be far more rigorous about expenditures. I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn't have a strong value justification."
Musk said he had been "disappointed" to discover waste and duplication within Tesla's contracting arrangements. "Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work," he said.
"This means a lot of middle-managers adding cost but not doing anything obviously useful. Also, many contracts are essentially open time and materials, not fixed price and duration, which creates an incentive to turn molehills into mountains, as they never want to end the money train.
"There is a very wide range of contractor performance, from excellent to worse than a drunken sloth. All contracting companies should consider the coming week to be a final opportunity to demonstrate excellence. Any that fail to meet the Tesla standard of excellence will have their contracts ended on Monday."
Expanding on his approach to internal communication at Tesla — in a previous staff email, Musk outlined his belief that "anyone can and should talk to anyone else" at the company rather than going through management silos — he ended the email with "a few productivity recommendations".
"Excessive meetings are the blight of big companies and almost always get worse over time," he said. "Please get [rid] of all large meetings, unless you're certain they are providing value to the whole audience, in which case keep them very short.
"Also get rid of frequent meetings, unless you are dealing with an extremely urgent matter. Meeting frequency should drop rapidly once the urgent matter is resolved.
"Walk out of a meeting or drop off a call as soon as it is obvious you aren't adding value. It is not rude to leave, it is rude to make someone stay and waste their time.
"Don't use acronyms or nonsense words for objects, software or processes at Tesla. In general, anything that requires an explanation inhibits communication. We don't want people to have to memorise a glossary just to function at Tesla.
"Communication should travel via the shortest path necessary to get the job done, not through the 'chain of command'. Any manager who attempts to enforce chain of command communication will soon find themselves working elsewhere.
"A major source of issues is poor communication between departments. The way to solve this is allow free flow of information between all levels.
"If, in order to get something done between departments, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen.
"It must be OK for people to talk directly and just make the right thing happen.
"In general, always pick common sense as your guide. If following a 'company rule' is obviously ridiculous in a particular situation, such that it would make for a great Dilbert cartoon, then the rule should change."
