Every single car maker, except in China, has dumped its EV line en toto.
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The company’s shares were down 3% on Monday morning.
“As
we prepare the company for our next phase of growth, it is extremely
important to look at every aspect of the company for cost reductions and
increasing productivity,” Musk said in the memo obtained by CNBC.
“As
part of this effort, we have done a thorough review of the organization
and made the difficult decision to reduce our headcount by more than
10% globally,” the memo said.
The memo was first reported by Electrek.
Tesla had 140,473 employees as of December 2023.
Tesla
shares have taken a bruising in recent months, falling 31% year to
date. While electric vehicle sales are still gaining popularity
worldwide, their sales growth rate has slowed especially for Tesla. The
company now faces more competition than ever.
To end 2023, China’s BYD temporarily dethroned Tesla as the world’s top EV maker. Chinese smartphone company Xiaomi in March said it would sell its first electric car for far less than Tesla’s Model 3.
Musk
has previously recognized that China, home to a large Tesla factory,
may also house the company’s strongest competition. “There’s a lot of
people who are out there who think that the top 10 car companies are
going to be Tesla followed by nine Chinese car companies. I think they
might not be wrong,” Musk said in November.
Some would-be Tesla customers are now skipping the brand owing to Musk’s incendiary rhetoric
Earlier
this month, Tesla reported its first annual decline in vehicle
deliveries since 2020, when the Covid-19 pandemic disrupted production
extraneous of demand — first-quarter deliveries fell by 8.5%
on the year to 386,810 in the first quarter, with output down 1.7% from
a year earlier and 12.5% sequentially despite discounts and incentives
offered to customers throughout the quarter.
https://www.cnbc.com/2024/04/15/tesla-shares-dip-in-premarket-trade-on-global-layoff-reports.html