Tesla had canceled a long-promised budget car, expected to cost $25,000, that investors were counting on to spur mass-market growth
Tesla, the largest car company in the world by market value, with 140,473 employees globally as of December 2023, has decided to cut more than 10% of its global workforce which equates to 14,000 jobs. «We have made the difficult decision to reduce our workforce by more than 10% globally – explained Tesla CEO Elon Musk in a letter to workers –: this will allow us to be lean, innovative and eager to face the next growth phase cycle.” Tesla shares have lost 31% since the start of the year, due to a drop in demand for electric cars and fierce competition from Chinese rivals. According to the specialized site, Electrek.co, which first reported the news of the staff cuts in the Texan company, production in the Gigafactory in Shanghai would also be reduced.
But what are the causes of these layoffs? On the one hand, the brutal price war with electric vehicles produced in China, on the other hand, has certainly affected the global slowdown in electric vehicle sales. In detail Global vehicle deliveries in the first three months of 2024 for Tesla fell for the first time since 2020 as Covid-19 curbed production and sales. But that’s not all, the American electric vehicle manufacturer has been slow in renewing its obsolete models: according to some sources reported by the international agency, Reuters was cCanceled a long-promised budget car that was expected to cost $25,000 and that investors were counting on to spur mass-market growth.
At the same time, high interest rates have sapped consumer appetite for ultra-expensive Tesla models, while rivals in China, considered the world’s largest car market, have started rolling out cheaper models.
In other words, the job cuts come at the same time as a slowdown in electric vehicle sales is destabilizing the entire global auto industry, with companies across the supply chain finding themselves forced to cut jobs and production costs. .
Reuters
The adoption of electric vehicles has been slower than expected, so much so that even the English oil and energy group BP has made the decision to reduce the workforce in its electric vehicle charging business by more than a tenthwithdrawing it from several markets after the bet on the rapid growth of commercial electric vehicle fleets did not bear the desired results. There is talk of 900 people made redundant for BP, with many employees moved to other divisions.
The plan to transition from oil and gas to low carbon energy had created many doubts among investors and BP Pulse in recent months has decided to adapt and reduce the number of countries it focuses on from 12 to four – States United States, Great Britain, Germany and China – and where he predicted faster growth in the electric vehicle market. Electric vehicle charging remains one of BP’s top five growth drivers: By the end of 2023 BP had over 29,000 charging points worldwide, up from 22,000 the previous year. The goal is to reach 100,000 points by 2030. BP had initially expected that commercial car fleets would be the first and fastest to switch to electric vehicles on a large scale. This hasn’t worked, in part because governments have relaxed mandates for the transition to electric vehicles. And this led BP to close its domestic electric vehicle charging business last May, focusing mainly on fast charging hubs.
Returning to Tesla, too the senior vice president, Drew Baglino, has announced that after 18 years he has left the parent company in Austin, Texas.
This is the second departure of a senior executive in eight months and is believed by several analysts «the biggest negative signal today» also with respect to the announcement of job cuts, since signals that Tesla’s major growth phase is encountering serious obstacles.
Tags: Elon Musk fire thousand Tesla employees
