Sales are declining, the stock has lost almost a third of its value, and the electric car manufacturer is suffering the full brunt of competition. Elon Musk, CEO of the American automobile manufacturer, announced that he would lay off more than 10% of his workforce worldwide.
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After years of success, Elon Musk’s group, which revolutionized the electric vehicle sector, is experiencing a downturn. Tesla sales are falling, and not just a little: -8.5% over one year. In fact, households have equipped themselves with electric cars, and we are reaching a sort of plateau. Overall demand is declining, particularly in the United States, which remains Tesla’s largest market. The firm finds itself with nearly 150,000 excess cars.
The American group is also facing the full brunt of competition, especially from China, notably from BYD. At the end of last year, this Chinese manufacturer stole Tesla’s place as the leading electric car manufacturer. BYD cuts prices, flooding the market with small, inexpensive cars, while Tesla remains more at the high end. To try to resist, Tesla lowered its prices and halved its operating margin. And in recent months, the stock has lost more than a third of its value on Wall Street. If the Tesla company is still valued at more than 500 billion dollars, it was estimated at twice as much three years ago.
Investors tired of Elon Musk?
Elon Musk will cut jobs around the world, including at Tesla’s European factory in Germany. In the email sent to his employees, Elon Musk explains that Tesla has grown far too quickly, there are now 140,000 employees in total, and that this meteoric growth has generated duplicates. Managers are therefore asked to list excess positions as quickly as possible to breathe new life into the brand and to work on new models.
This isn’t the end of Tesla’s success, but it’s quite a setback. For a long time, Elon Musk has been promising the arrival of his famous $25,000 Model, dangling the 100% autonomous vehicle and promising the presentation this summer of a Tesla Robot-taxi. And it seems that investors are tired of this iconoclastic boss, who dreams of controlling minds with his network X (formerly Twitter) or of conquering space with his rockets. Elon Musk is forced this time to come back down to earth.