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Musk’s ‘absolutely hardcore’ Tesla layoffs could hurt EVs everywhere
Insights from Elektrek, Ars Technica, and The Verge
The News
Tesla is eliminating most employees on the electric vehicle company’s Policy and Supercharger teams, along with several long-time executives. The cuts come on top of a recent layoff affecting 10% of the company’s global workforce.
Tesla CEO Elon Musk said in an email to staff that he will be “absolutely hardcore” about staffing at Tesla — his signature phrase to signal hard work ahead. He said any executive “who retains more than three people who don’t obviously pass the excellent, necessary and trustworthy test” should resign, according to the email, first reported by The Information.
Nixing the Supercharger team could hinder Tesla’s dominance over the global EV charging network, experts said, but Musk said on X that Tesla is still committed to growing the network, but at “a slower pace for new locations” and would instead focus on optimizing existing charger locales.
SIGNALS
Analysts question decision to cut ‘star asset’
As the name suggests, Tesla’s Superchargers charge EVs far faster than typical chargers, and the global network is considered by many as the company’s “star asset,” Ars Technica wrote. Tesla has the world’s largest EV charging network, and without fast charging, driving an EV cross-country is impractical. Tesla lets rival carmakers, including Ford, use its Superchargers, and in turn, those competitors have adopted Tesla’s charging connector system into their EVs — effectively giving Musk’s firm a monopoly. “It makes absolutely no sense to lay off the Supercharger team,” EV news site Elektrek wrote, calling the move “absolutely crazy.” Tesla has a strong business case for going all-in on Superchargers; a recent BloombergNEF analysis estimated the company could generate $740 million in annual profit from worldwide public-charging revenue by 2030. At least one former Tesla employee has already speculated that another automaker could use this chance to take on the EV giant: “If Tesla is yielding the charging crown, who will step up?”
Layoffs follow broader Tesla troubles
The staff cuts come during a tough time for Tesla. The EV giant’s most recent earnings report was “terrible by almost every metric,” InvestorPlace wrote: Its revenue is down 9% compared to last year, and its profits hit their lowest level in six years “thanks to rampant price cutting and slowing demand.” Tesla recently lowered prices on its EVs in three major markets — the US, China, and Germany — to try and woo new customers, but the carmaker also reported a drop in deliveries. Meanwhile, Tesla recalled all of its Cybertrucks in the US, just months after they belatedly hit the road, to fix a malfunctioning accelerator pedal. The Cybertruck has been beset by production issues since its inception, a reflection of how “Tesla gives the impression that it accepts certain risks as the price of innovation,” Elizabeth Spiers wrote in The New York Times.
Musk scored win in China
Tesla’s CEO does have at least one bright spot: During a surprise 24-hour visit to China, Beijing tentatively blessed Musk’s plan to launch Tesla’s full self-driving technology in the country, leading the EV company’s shares to surge early Monday. Some analysts called the visit a “watershed moment.” Beijing’s nod came after Tesla inked a deal with Chinese tech giant Baidu to provide it with mapping and navigation functions; China requires foreign smart car firms to use government-approved local suppliers. Musk has been aggressively pushing for wider adoption of Tesla’s full self-driving for some time, and a rollout in the world’s biggest car market would help the company compete with Chinese EV makers, many of whom offer advanced driver-assistance systems of their own.
