Tesla continues to ramp up its efforts to become a leaner EV company. In mid-April, a company-wide email informed Tesla’s global workforce that they can expect a 10% reduction out of a total of 140,000 workers.
These indicate a drastic shift in the company’s priorities, from expansion to survival through cost-efficiency increases.Elon Musk confirmed the shift in an email to employees, noting their need to go “absolutely hardcore.” Specifically, this is to catch up with the 18% YoY cut in gross profits and the 9% YoY cut in total deliveries in Q1 2024. From Q3 earnings to Q1, Tesla saw a 20.1% fall in EV deliveries.
Year-to-date, TSLA stock is down 27.6% at $179.36, or 67% lower from its 52-week high of $299.29 per share. The question for investors is whether Tesla has enough runway to weather the lagging demand for EVs.In the early stages of EV adoption, Elon Musk made it a point to launch them as luxury vehicles. This broke the public perception of such cars as unwieldy and awkward, attracting investors. At the same time, this strategy set up a ceiling for EV adoption.
This also created the impression that Tesla rushed the development without checking all the QA boxes. Further layoffs will likely not improve that perception.Elon Musk set the date for August 8th to unveil the much-anticipated Tesla Robotaxi. It is supposed to share the platform with the previously speculated next-gen $25,000 EV codenamed “Redwood,” pushed back to late 2025 production. Now dubbed Model 2, the EV’s potential boosted TSLA value by 10% last month.
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