Tesla, under Elon Musk’s leadership, plans to reduce its global workforce by over 10% due to challenging market conditions. This decision aligns with Tesla’s stock decline of over 5%, marking a year-to-date slump of 31%. Despite electric vehicles’ ongoing popularity, Tesla faces hurdles in sustaining previous sales due to increased competition and internal operational challenges.
Criticism of Musk’s statements has led to hesitancy among some potential buyers, compounded by a decrease in Tesla’s car sales for the first time since 2020, attributed to difficulties in sourcing parts and production.
Once, Tesla was the top electric car maker, but now a company from China, BYD, has briefly become number one. This shows how tough things are getting in the electric car world, with new companies like Xiaomi making cheaper cars. Musk knows there’s more competition, especially from Chinese companies, and thinks things might change a lot in the car world.
Tesla’s going to share how they’re doing financially soon and they’re trying to figure out how to deal with competition and fix things inside the company while they keep growing.
In response to market pressures, Tesla reduced the subscription price of its Full Self-Driving (FSD) option, diverging from previous commitments to increase prices with the introduction of new features. Despite its moniker, the FSD system mandates driver attention and does not facilitate fully autonomous driving.
Operational challenges have compounded Tesla’s conundrum, with disruptions in component supply stemming from maritime attacks and production halts at its gigafactory near Berlin following suspected arson. Additionally, notable executives, Drew Baglino and Rohan Patel, announced their departure from the company.
Tesla’s imminent first-quarter financial report, due on April 23rd, is pivotal for assessing its performance amidst present challenges. Tasked with achieving continued growth in an evolving automotive sector, Tesla must grapple with intense competition while also tackling internal operational issues.
Here’s the full memo from Musk :
