Analysts weigh in on 'far-reaching' Tesla layoffs as stock extends slump

Tesla shares extended declines Tuesday, pulling it close to the lowest levels since last spring, following the group's largest-ever job cuts, which have analysts and investors questioning the longer-term growth story of one of the market's most popular stocks.

The Austin electric-vehicle group (TSLA) unveiled the layoffs in a companywide memo penned by Chief Executive Elon Musk, who told employees it was time to "streamline the company for the next phase of growth."

"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. "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 cull, which is likely to total around 14,000 employees, also included two key executives: Drew Baglino, who headed Tesla's battery division, and Rohan Patel, vice president for public policy.

Tesla shares have been in an extended drawdown since the company posted a weaker-than-expected first-quarter profit update in early February. The report included narrowing profit margins and a warning that full-year delivery totals would be "notably lower" than they were in 2023.

Deliveries have also disappointed investors, with the group handing over 387,000 new cars to customers during the three months ended in March. That was a 20% decline from the record 484,000 it notched over the final months of last year and the biggest miss to estimates since Wall Street began compiling data in the mid-2010s.

Weaker-than-expected sales figures from China, where last month's volumes fell to the lowest levels in more than a year, are also adding to pressure on the market's aggressive full-year delivery targets for Tesla.

You have a lack of understanding of Elon Musk's thinking. His mission was to push the world into EVs.

So, you have a better understanding of MUsk's thinking than he does?

Musk may have wanted to build EVs, but, he's finding out that, there is huge resistance in the marketplace to them. People don't want them, and a good percentage of those that bought into the initial hype have had second thoughts, not only for Tesla vehicles, but for the whole idea of EVs, no matter the maker.

Musk/Tesla are having to rethink their company, including the EVs and the battery division. No matter how much anyone tries to spin what Musk/Tesla are doing, the fact remains that, EVs are not changing people's minds about going to EVs in place of ICE vehicles.

You can spin all you want about what Musk had in mind originally, but, we're talking about the present day reality of EVs not making it in the marketplace.

Robo-cars may become reality in the future, but for now, people don't trust them to do the driving for them, and what's available now are for very short-distance minimized areas. Believe me, I wanted the self-driving vehicles to come to fruition, as I made a big stink about them even her on FR, but, it's been disappointing up to now.

Whatever else Musk does, reality is that EVs have been huge disappointments and people are either not buying or returning them. I know, I've see new dealer lots with new EVs not selling and a huge number of returned EVs or traded in EVs. The hot thing now is hybrid vehicles, but still, people prefer strictly ICE vehicles.

Your arguments are mostly about Musk and his vision, but, he's facing the reality that EVs are not what people are looking for. Tesla vehicles may remain the niche car in the market, but EVs in general are kaput.

So, you have a better understanding of MUsk's thinking than he does?

No, I only repeat what he stated, period. I don't make things up.

How has he failed? He accomplished his goals. Some buyers may have complained, but the company is successful. I saw similar arguments against Apple early on in the late 1990's , a lot of people like you saying they would go under. I bought stock when it was in the teens/share, and saw it go through stock splits as it became a tech behemoth. This happens with other companies with new technology, they encounter fierce resistance even as they grow. I was an early adopter of new tech going back to the mid-1970's, and have seen many companies fail while others grew. Tesla is one that is, and will continue growing. Tesla is not going under anytime soon. They continue having growth and profitability year over year, and I am glad I bought stock early on. I don't own a Tesla vehicle, but I have an interest in the company because I own stock. As for Tesla vehicles, they continue to sell even as other EV producers are failing. I never said EVs will change the minds of customers that want ICE vehicles, and I agree that ICE vehicles will continue to dominate well into the future.

I own several ICE vehicles, as well as an EV. (Actually a 5th that I am completely rebuilding.) So far, my EV is my daily driver and I personally see nothing in it to disappoint me. Mainly because I can shift to the ICE vehicles as needed. Not everyone's situation, so others will continue to be dependent on owning an ICE vehicle. (Except for my brother-in-law living in a condo, he couldn't buy an EV because of no charge port, so he bought a hydrogen-powered car - big mistake because refueling stations are getting closed down here in California.)

Let's revisit this topic in 5 years and see how it plays out. I say EV's will still be around, about 40 percent penetration of the market, and ICE will continue to dominate. And Tesla will be a powerhouse tech company with growth like Apple, Amazon, Google, and META. GM will be lucky to still be around.

Let's revisit this topic in 5 years and see how it plays out.

No need to wait that long.

This is the determining year. Sales of EVs are tanking, with the possible exception of Tesla, but even Tesla is seeing a slowdown in EV sales.

No major car company can continue suffering losses like Ford and GM have. They are cutting back on EV production and may even terminate them in the next year or two. Mercedes may have made a huge mistake with going exclusively with electric vehicles, but then, because of the high prices of petro-fuels in Europe, they may have a chance, but, once petro-fuels become less expensive, EVs in Europe will take a hit there.

SEeing is believing and what I saw in new dealers stockpiles of EV, made me see that, EVs are a loser product.

EVs have been a bad idea from the start, with very limited range,and very slow recharge times, and high initial prices, and very high prices for replacement batteries (when needed) and poor performance in cold weather and hot weather environments.

That you have ICE vehicles along with EVs, says a lot about EVs. You can't trust EVs for everyday usage, and you are hedging your bets. Not everybody can afford to buy and maintain both kinds of vehicles, which is the reason that EVs will NEVER replace ICE vehicles in the marketplace and will never achieve more than 20% of the market (if that).
Nice try, but, EVs are still a bad idea for commonplace use.

Name one.

At this point, just about every luxury brand of Ev is equal or better than Teslas. The European makes have very good technology inside,and when it comes to battery-range and drive quality, they are equal of better than Teslas.

Tesla has the name recognition, because it was 'first' to market with a somewhat believable EV and EV quality and good tech. But, there are plenty of very good alternatives on the market now, and many of them are about the same price and even lower-priced.

I have Lexus SUV and when I take it to the dealer for maintenance, I'm tempted by their EV SUV version of my RX-350. Nice vehicle, but then, I realize that it's still an EV, so, no sale. They've come out with a hybrid, but then, why even bother since most of the driving will be with gasoline, so even that makes no sense. Go check out the Lexus EVs, which to me look nicer than Teslas and roomier and with very good tech inside, with prices that in some cases are lower than Teslas.

And, btw, Lexus/Toyota have been around a lot longer than Tesla, so support is more widespread and more readily available.

This is the determining year. Sales of EVs are tanking, with the possible exception of Tesla, but even Tesla is seeing a slowdown in EV sales.

Okay, let's revisit this topic in 1 year, not 5. Tesla is the exception in western markets. Tesla has seen growth year over year. It is the number 1 car seller in many European markets. That's not just among EVs, but among all sales including ICE and EVs. Gosh, those Europeans are darn stupid! You say Tesla is seeing a slowdown, but that is a slowdown of growth. They are still producing and selling many vehicles, and sell and make a profit on each and every one. When you say that EVs are tanking, you should clarify it to mean that non-Tesla EVs are inferior to Tesla. EVs are not selling on GM, Ford and other sales lots. Because they are a mess. Instead of concentrating on smaller urban EVs, they built batteries onto ICE platforms, notably trucks. They can't adequately tow or haul due to halving their limited range. Dumb.

At this point, just about every luxury brand of Ev is equal or better than Teslas.

Nice try, but you can't name one. When it comes to EV technology, Tesla has proven to be superior. You may be thinking of luxury appointments, I'll give you that. But that has nothing to do with tech that Tesla improved on, like single-cast rear and front frames, heat/chill pumps, AI software, over-the-air updates, etc. There is a reason why Tesla is outselling all EV cars in Europe.

AI software, over-the-air updates, etc.

Stop with the AI nonsense. Just about every vehicle made today that has connectivity via ports, have AI, and have had AI since AI was made available through the internet, with sites such as Google and Bing/Microsoft and others. I've had AI through my smartphone for more than a year, and I connect that to my Lexus interface and I've used it many times the last year.

AI within the on-board screen on any vehicle, is overkill and unnecessary. Just use AI through smartphones and you're set. In fact, many new cars (EVs and otherwise) are opting for AI and other apps through smartphone connections. My Samsung Galaxy s24 ultra has everything I need to make my car quite intelligent.

Besides, AI is highly overrated, and mostly unneeded.

When it comes to the niceties inside EVs, most are being designed with high quality materials and great/roomy interiors (except for the lower sized and low priced entries). Many of the new vehicles are designed with higher range than any Tesla vehicle, but I still would not fall for any of them, since their biggest negative is still that, they're still EVs.

E.V. Sales Are Slowing. Tesla’s Are Slumping.

https://www.aljazeera.com/economy/2024/4/16/tesla-to-lay-off-more-than-10-percent-of-staff-worldwide-amid-falling-sales

I know you LOVE Tesla and Musk, but...

Face reality and stop being in DENIAL.

It's not me refusing to understand the FACTS. It's YOU refusing to face the FACTS. The facts don't match your wishes or desires.

When it comes to AI, I'm pretty sure I understand the technology a lot better than you, since I was in the computer/programming/data analysis/systems design industry and I even worked on some of that. Not in the industry any more, but, I do know what the heck it's about much better than you, and I still say it's over-hyped. Even so, I've been using "AI" for a long time now, but, it's not as intelligent as the hype would make people believe.

Get over yourself and start facing reality in the EV market and in the technology sector.

It’s useless speaking facts to you, which you ignore because of your bias against EVs and AI. Stay in the past, and ignore reality. I’m done trying to present the true situation which you ignore. Tesla is successful, continues to be profitable, and is becoming a giant in the tech world. And my stock portfolio makes me smile.

Get over yourself and stop being a dick. I don’t think you understand technology at all. I’ve been computing since the 1960s. I worked with mainframes, minis, and micros. I worked as a programmer in multiple languages, from high-level to machine code. What are you, 15 years old? I worked as a senior systems engineer, involved in planning for new data centers. I worked as a manager of a tech team. So don’t think you know it all, I don’t but I’ve been around when it comes to computing.

No, I don’t love Tesla and Musk. I look at facts and invest my money wisely where it grows. I’ve seen my stock holdings go through a couple splits that grew 1500 percent. What do you invest in, GM?

Hey, I understand what it means to be in denial. I’ve been there myself.

But, why deny that you are love with Tesla and Musk. When you love something and want that something, you don’t go into denial. You’re even disregarding the links I posted, which were the opposite of your wishes/desires/thinking.

Now, when it comes to AI, I still say that its way overrated and over-hyped. It’s useful, but not really that intelligent. It’s just computing emulating intelligence, but a very low level. People have swallowed the hype, but, many will be disappointed. But, you can continue to be in denial about that too.

And, hey, sounds like your experiences in data-processing/computer-science are similar to mine.

But, I don’t go around bragging about it.

I started my data=processing career in the 1960s, and I worked on just about all computer platforms available during that career, including IBM and Burroushs and NCR and Honeywell and Tandem mini-computers (my favorite). I also worked on just about any application one can think of, and with all kinds of computer languages, including COBOL and C/C++ and ADA and ALGOL and Assembly languages, and NEAT-3 (bet you never heard of that one), and SCOBOL (Tandem again) and TAL (Tandem again), and various other PC languages, and much more.

I specialized in designing and programming and managing databases for different companies, and I even designed my own version of data management software.

During my 40+ data-processing/computer science career, I heard and read a lot about ‘intelligent’ emulation software, and from what I saw/read, they all left a lot to be desired. This current attempt at intelligent software ‘programming’ (AI) is a bit more sophisticated, but still not that intelligent.

All in all, you’re still the one denying reality, with all the subjects we have been discussing.

So, take a break from your love of all things Tesla/Musk, and come back to reality. EVs have met their match, and that match is that, people are not buying them as much and don’t listen to the hype of the last 20 years any more.

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