Tesla Shares Dive 6% Amid Musk's Supercharger Team Shake-Up
Tesla's shares took a nosedive, plummeting nearly 6% on Tuesday, as CEO Elon Musk initiated further job cuts within the company, impacting approximately 500 employees within its Supercharger team. The day concluded with the stock closing at $183.28, marking a staggering 26% decline for the year.
Reportedly, Musk dispatched an email to Tesla managers overnight, announcing the departure of key executives, such as Senior Director of EV Charging, Rebecca Tinucci, and Director of Vehicle Programs, Daniel Ho. Expressing frustration, Musk conveyed his discontent with the management's delay in executing staff reductions promptly per his directives.
Confirming the ongoing reorganization, several affected employees, alongside one current Tesla employee in California, disclosed details to CNBC on condition of anonymity due to the sensitivity of the matter. Additionally, former Tesla employees publicly shared their experiences of the company downsizing its Supercharger team.
This reduction in workforce signifies a deliberate deceleration in Tesla's Supercharger network expansion across the United States. The decision follows Tesla's recent collaborations with major industry players like Ford and GM, ensuring compatibility with Tesla charging stations by adopting the Tesla NACS (North American Charging Standard), thereby granting access to Tesla stations for their customers.
The ongoing layoffs form part of Tesla's extensive cost-cutting measures, catalyzed by a notable 9% revenue dip in the first quarter of the year, marking the sharpest year-over-year decline since 2012. With profits halved in the first three months of 2024, Tesla resorted to discounting cars and offering incentives to stimulate demand.
Current and former employees disclosed that Tesla commenced layoffs as early as January, with a significant surge in cuts occurring this month. Shockingly, some employees, believing their positions secure, received termination notices unexpectedly on Friday and Tuesday.
Tesla's decision to scale back its charging infrastructure plans caught investors off guard, as the company failed to provide any forewarning. Furthermore, certain charging network partners, including small and medium-sized businesses responsible for installing and maintaining EV charging equipment, were blindsided by Tesla's actions.
Andres Pinter, co-CEO of Bullet EV, a contractor for Tesla's Supercharger network, expressed the shock felt by his team following Tesla's sudden shift in expansion plans. Pinter revealed to CNBC, "My team woke up to a sharp kick in the pants this morning. Emails we sent to twenty or so different charger construction contacts were bounced with the same autoreply reading, ‘This email address is no longer valid. Any future emails sent to this address will not be received.’" Despite acknowledging that it may take years for other charging networks to catch up, Pinter sees an opportunity for alternative players in the wake of Tesla's pivot.
Elon Musk addressed the situation on X, affirming Tesla's commitment to Supercharger network growth albeit at a slower pace, emphasizing enhanced uptime and expansion of existing locations. Tesla's revenue streams from environmental credits and charging fees underline the importance of their charging infrastructure, with Tesla currently operating approximately one in three public electric vehicle charging stations in the U.S.
Amidst discussions on AI initiatives and self-driving technology, Tesla's core mission remains focused on accelerating the world's transition to sustainable energy, as highlighted in its recent annual report. However, despite a 15% stock rally on Monday driven by reports of a significant deal with Baidu in China for mapping tech, skepticism persists. Junheng Li, founder of JL Warren Capital, cautioned investors about the lack of crucial details to justify Monday's gains, particularly regarding Tesla's autonomous driving prospects in China.
While Tesla's tentative autonomous driving deal in China garnered attention, critics argue it falls short of making the company 'magnificent' just yet. Xpeng, Nio, and other EV makers already offer level 2 systems as incentives in China, raising questions about Tesla's competitive positioning in the region.
In conclusion, Tesla's abrupt changes in its Supercharger network expansion plans have sent shockwaves through the industry, leaving contractors like Bullet EV scrambling to adjust. While Tesla remains committed to its mission of sustainable energy transition, recent developments raise questions about its strategic direction, particularly in the context of autonomous driving ventures in China. As Tesla navigates these challenges, investors and industry observers await further clarity on its future trajectory amidst an increasingly competitive electric vehicle landscape.
