Posted on 04/16/2024 10:08:04 AM PDT by SeekAndFind
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.
(Excerpt) Read more at msn.com ...
This was 10%. Nothing new. Musk has done this periodically, and it is a bit normal in some industries to periodically layoff 10%, the dead weight.
Well, lets see if the other EV makers get the hint. The market for EVs is declining and there is no profits to be made with them, and losses in revenue and assets are the only things to expect.
But, they keep listening to government edicts, so, losses will continue to mount for the whole EV market.
Sorry to hear about the Tesla decline, because, I like Musk, but then, he has to listen to the people and the people are not buying.
Anyone with two brain cells to rub together would look at the EV market and be able to fully predict what is going to happen to Tesla and every other dominant makers of EVs, but only if the government doesn’t get the point of shoving BS down people’s throats before people catch on to the scam.
It is a race against time. There is still hope to kill EVs.
IMO-—MUSK will make more PROFIT with STARLINK & SPACE X
Analysts know NOTHING, just trying to earn a paycheck with clicks.
It shows the bias of Wall Street against Tesla. As you say, a 10% reduction is nothing new, Tesla has done it a few years ago, and will do it again. Other companies periodically do it also, yet their stock goes up - example is Cisco recently. (I've owned stock in Cisco, and own stock in Tesla.)
It is a buying opportunity in Tesla stock, and it will double in price by end of year.
GE, under Jack Welsh, had an open policy of culling the lowest performing 10% annually.
To be fair to Musk and Tesla, people are buying. However, Tesla is constrained by parts availability and has a long waiting list for buyers who put down deposits. They make a profit on every vehicle they sell, unlike Ford and GM who lose money on each EV.
He has smartly kept those companies private, away from the interference of Wall Street analysts. IMO Tesla will make more profit from their electricity utility division and AI/robotics division which will include robo-taxis.
This way lousy sales don’t cut into Elon’s billions of dollars he rapes from the company to stuff in his own pockets
Good question, but answers are all over the map. Why is META (Facebook) going for over $500/share? META was going for $119/share in early 2023 and shot up to $500/share one year later (kicking myself for not buying while watching). One answer has to do with AI and supercomputing. Well, Tesla is also heavily involved in AI and supercomputing, having AI resources that are more powerful than Facebook.
The key here, is that Tesla is not a car company. They are a technology company, and their strength lies in AI and supercomputing. Their electricity utility division and AI/robotics division are poised to overtake their car profits in the near future (a year or so).
Drew Baglino, Tesla’s head of powertrain and electrical engineering, was among a number of top execs who quit or were laid off.
Company I worked for did the same thing. They called it “mowing the grass.”
No, nice try. It was not Musk's intention to remain in the market selling cars. The guy is playing chess while you and others play checkers (or tic-tac-toe). He had a simple financial plan, to push the world towards using EVs. Build a sports car for rich investors, then build an EV sedan, then build an EV SUV, then build an inexpensive $25K car for the masses. He has stuck to this plan, with a diversion into semi-trucks and the CyberTruck. The semi-trucks help in moving components between factories, and the CyberTruck is an experimental platform for testing new technology to go into future cars (the $25K car and a robo-taxi). He then plans to exit building cars for the masses, will shift to robo-taxis and is focusing on AI and robotics.
His FSD for self-driving is the best in the world, and is due to their AI tech, and that tech will go into the TeslaBots that he is building. That alone, will surpass his EVs in profitability.
The stock skyrocketed, and I got in early and have seen my holdings multiply during two splits. Even with the recent decreases, I'm holding for the long run because I still have profits and expect it to rebound this year.
You have a lack of understanding of Elon Musk's thinking. His mission was to push the world into EVs. He is accomplishing that, successfully. His intention is to now shift into robo-taxis. Tesla will continue to build EVs, although the focus will be to build and utilize robo-taxis. That is where Tesla will make money on EVs in the near future. He believes that the public will shift to calling robo-taxis for transportation rather than be burdened with personal ownership of cars.
Myself, I will continue to enjoy owning my own vehicles. I have four, including one EV, and enjoy using and modifying them. But there is a segment of society who will not want to own cars. I also believe that EVs won't penetrate market share of vehicles beyond 40 percent, and that is where I differ with Musk and others who believe the world will shift to all EV use.
Keep an eye on August 8th this year. That is when Tesla will reveal the robo-taxi.
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