Tesla: job losses, plunging share price and uncertainty plague EV giant as CEO Musk prioritises robotaxi

Name: China’s BYD overtakes Tesla as world’s largest EV maker
Uploaded: 2024-04-22T02:53:02.000Z
Duration: 1 min 11 s
Description: China’s BYD overtakes Tesla as world’s largest EV maker

Musk has put off plans for a US$25,000, mass-market vehicle that many Tesla investors believe is crucial to the carmaker’s future

On Tuesday, Tesla is expected to report a 40 per cent plunge in operating profit and its first revenue decline in four years

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Elon Musk has ordered Tesla's biggest lay-offs ever and staked its future on a next-generation, self-driving vehicle concept called the robotaxi, unsettling many at the company. Photo: Reuters

Bloomberg

Published: 10:53am, 22 Apr 2024Updated: 1:28pm, 22 Apr 2024

Elon Musk’s underlings at Tesla are accustomed to chaos. It comes with the territory of working for a chief executive who sets exacting targets and often abruptly switches directions – and whose biographer describes his more intense moods as “demon mode”.

But even by Tesla standards, this year has been unruly. Its stock has slid more than 40 per cent amid slumping sales, confusing product decisions and more price cuts. Its once-dominant position in China’s electric vehicle (EV) market is under assault. A visit with India’s Prime Minister Narendra Modi for an anticipated investment announcement was called off at the last minute. All the while, the board has tried to revive a US$56 billion payout to Musk that a judge voided in January, on the grounds that directors had acted as “supine servants” to the CEO.

On Tuesday, Tesla is expected to report a 40 per cent plunge in operating profit and its first revenue decline in four years. Musk has ordered the company’s biggest lay-offs ever and staked its future on a next-generation, self-driving vehicle concept called the robotaxi. People familiar with his directives, who asked not to be identified discussing internal deliberations, are unsettled by the changes the CEO wants to push through.

The idea of creating an autonomous taxi service has been kicking around Tesla for at least eight years, but the company has yet to stand up much of the infrastructure it would need, nor has it secured regulatory approval to test such cars on public roads. For the moment, Musk has put off plans for a US$25,000, mass-market vehicle that many Tesla investors – and some insiders – are pushing for and believe is crucial to the carmaker’s future.

In the wake of media reports on the strategic shift, key managers including Drew Baglino, an 18-year company veteran who headed Tesla’s power-train engineering and energy business, have left.

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China’s BYD overtakes Tesla as world’s largest EV maker

Musk, 52, has steered Tesla out of many jams in the past. At US$469 billion, the company is still valued at more than nine times the market capitalisation of General Motors or Ford Motor. But after losing almost US$350 billion in market cap over four months, employees, investors and analysts alike are bewildered and second-guessing the company’s strategy.

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