Source: Xinhuanet
This is a Tesla car dealership photographed on April 15 in San Mateo County, California, USA. Xinhua News Agency (photo by Li Jianguo)
According to US media reports on the 15th, Tesla CEO Elon Musk said in an internal email to employees that the company will lay off more than 10% of its global workforce to cut costs and improve productivity. On the same day, Tesla's stock price fell by more than 5%, and its market value shrank by $30.433 billion.
The news of Tesla's drastic layoffs quickly attracted widespread attention: Tesla, which has long been regarded as a benchmark enterprise for electric vehicles, is it really going "downhill"?
Global layoffs and executive departures
In an internal email to employees, Musk said that after a thorough review, a difficult decision was made to reduce the number of employees worldwide by more than 10%. He said this will allow the company to remain lean, innovate and enter the next growth cycle. According to Tesla's global workforce count, more than 14,000 employees will be affected by the layoffs.
Western media quoted industry insiders as saying that Tesla's layoffs were in response to the problems caused by declining sales and intensifying price wars for electric vehicles.
On February 8, at the McCormick Exhibition Center in Chicago, a reporter stood in front of a Tesla Cyber pickup truck. Xinhua News Agency (photo by Joel Reiner)
Tesla reported this month that its first-quarter global car deliveries fell for the first time in nearly four years as price cuts failed to spur demand. Tesla's gross margin in the fourth quarter was 17.6%, the lowest in more than four years. So far, Tesla's share price has fallen about 35% this year.
In addition, two senior executives, Drew Baglino, Tesla's head of battery development, and Rohan Patel, vice president of public policy, have also announced their departures recently, causing many investors to worry. Industry insiders said the departure of senior management was a "bigger impact" and a "bigger negative signal" that Tesla's growth was in trouble.
Innovation dividends, fierce competition
This year marks Tesla's 21st year of existence. In the past, Tesla boldly innovated in concept, design and technology, and was the first in the world to bring a "software-defined" car product to the market, and its innovation advantages brought it a first-mover dividend.
The first-mover advantage was not easy to come by, but after taking the lead in achieving a breakthrough from 0 to 1, the follow-up competition it faced was quite fierce. Competitors in China are introducing cheaper models. China's BYD overtook Tesla in the fourth quarter of last year to become the world's largest electric vehicle maker.
In the Chinese market, in order to cope with fierce competition, the continuous upgrading of products has almost become a basic operation in the industry. In contrast, Tesla's speed of updating models is a bit "slow". Some analysts believe that the sales of the Model 3 and Model Y as an example, the two products began to be delivered in 2017 and 2020 respectively, but over the years, not only the interior and appearance of the two products have not been changed much, but the hardware configuration has not been significantly improved compared with other companies' competitors.
This is a Tesla car photographed in a parking lot in San Bruno, California, on April 2. Xinhua News Agency (photo by Li Jianguo)
Tesla also appears to be hitting a bottleneck in the development of new projects. According to the American electric vehicle website, Tesla's previously announced funding for the cheap car project has been canceled, and many of those involved in the project have been fired.
Although there are media reports that Tesla will shift its focus to self-driving robo-taxis. Musk also recently posted on X: "Tesla Robotaxi will be unveiled on August 8". But self-driving car and regulatory experts say it could be years before Tesla releases a fully self-driving car with regulatory approval.
Some media analysts believe that Tesla has not launched a new model for many years, and the most important reason is that "it is no longer the only player in the city". This is a fork in the road not only for Tesla, but for the entire industry.
Slowing growth and shifting to India?
According to the Associated Press, the U.S. electric vehicle market has shown signs of slowing growth since the end of last year. Joe McCabe, a long-time auto industry analyst, said the EV market was in a sort of "precarious state" at the moment. According to McCabe, there are many barriers to EV sales: cost, range, infrastructure and raw materials. Things are getting better, but the problem remains.
In the U.S., car rental giant Hertz is selling about 20,000 electric vehicles and replacing them with cars that use internal combustion engines due to higher collision and damage-related costs. In October, General Motors announced it would cut production of electric vehicles, citing slowing demand. In January, Ford cut production of its electric pickup trucks in half.
Energy giant BP has also cut more than a tenth of its employees in its EV charging business after its bets on rapid growth in its commercial EV fleet have not paid off, underscoring the impact of the slowdown in EV demand.
On January 7, 2020, at Tesla's Shanghai Gigafactory, Tesla CEO Elon Musk attended the launching ceremony of the Model Y project made in China. Photo by Xinhua News Agency reporter Ding Ting
However, some analysts believe that it is too early to assert that Tesla is on a "downhill road", and Tesla is still one of the few car companies in the world that can achieve profitability only by relying on pure electric vehicle products.
According to foreign media reports, Musk plans to visit India in late April, when he will meet with Indian Prime Minister Modi and announce major investment plans. Just last month, the Indian government announced tariff incentives for new energy vehicle manufacturers who invest at least $500 million to start production in India within three years. Analysts generally believe that the Indian government's move is mainly to attract Tesla to invest in India.
(Reporter: Wu Xiaoling, Ma Xiao; Editor: Lu Yu, Wang Fengfeng, Dong Yalei)
(Source: Xinhuanet)