Tesla is to cut 14,000 jobs as Elon Musk’s company reckons with slowing demand for electric cars and aggressive competition from cut-price Chinese rivals.
In an internal email, Mr Musk told staff he had made the “difficult decision to reduce our headcount by more than 10pc globally”. Tesla employs roughly 140,000 people, meaning thousands of people around the world could lose their jobs.
Mr Musk said: “There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
The job cuts come amid slowing sales at both Tesla and across the broader electric vehicle (EV) market.
Earlier this month, Tesla reported its first fall in sales in four years, with deliveries in the three months to the end of March down 8pc compared to the same period a year earlier.
The company blamed the drop on disruption in the Red Sea and an arson attack by environmental activists at its Berlin factory.
However, the EV market is also witnessing a broader slowdown in demand. Higher electricity costs have put off buyers, while electric cars remain more expensive than their fossil fuel-powered equivalents.
In the UK, figures from the Society of Motor Manufacturers and Traders showed 15.2pc of new cars registered in March were electric, down from 16.2pc a year earlier.
Germany’s Volkswagen, the world’s biggest carmaker, reported its European EV sales had fallen by a quarter. Major manufacturers including Ford, Jaguar Land Rover and Mercedes Benz have delayed plans to update their line ups with more electric vehicles.
Tesla, which is known for its popular Model Y and Model 3 cars, is also confronting increased competition from Chinese rivals. Challengers, such as China’s BYD, have forced Tesla into a brutal price war. These manufacturers are increasingly expanding in Europe with budget electric vehicles to appeal to the mass market.
Shares in Tesla have dropped by almost a third so far this year and fell by 1.4pc in pre-market trading in New York on Monday.
Tesla, which has factories in the US, China and Germany, has been working to update its car range while attempting to woo consumers with improvements to the self-driving features its vehicles offer. It recently launched an electric pick-up, the Cyber Truck, however, plans for a new Roadster sports car have been repeatedly delayed.
Mr Musk has also been forced to deny reports that the company is planning to cancel a low-cost electric car that would sell for around $25,000.
In his email to staff, first reported by the blog Elektrek, Mr Musk said: “For those remaining, I would like to thank you in advance for the difficult job that remains ahead. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.”
The redundancies are the biggest in Tesla’s history, although Mr Musk has a reputation for firing underperforming staff and making deep job cuts.
Tesla previously laid off 7pc of its workforce in 2019 and 3.5pc of staff in 2022, when Mr Musk warned he had a “super bad feeling” about the global economy. The billionaire, 52, also enforced dramatic job cuts after his takeover of Twitter in 2022, laying off roughly 80pc of its workforce.
Separately, it emerged on Monday that BP has scaled back its ambitions for a global electric vehicle charging network, cutting jobs and pulling out of several markets.
BP has cut the number of markets served by its BP Pulse electric vehicle charging division from 12 to four. Reuters reported the energy giant had cut around 100 jobs from the division, roughly 10pc of its workforce. BP was contacted for comment.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
