Elon Musk to cut 14,000 Tesla jobs amid electric car slowdown (2024)

Tesla is cutting more than 14,000 jobs in the biggest layoffs in its history, as Elon Musk’s car 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 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 cuts come amid sales struggles 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.

Matthias Schmidt, an analyst at Schmidt Automotive Research, said: “Tesla no longer appears to be immune from bumpy market conditions.”

Like other car makers, Tesla is confronting a global slowdown in demand for EVs. 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 car maker, 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 in the face of the changing market conditions.

Separately on Monday, it emerged that BP’s EV charging division had cut around 10pc of its workforce.

BP Pulse shed about 100 jobs out of a previous total of 1,000 in the past six months, with a further 100 people moved to other posts within the division and across the group.

The oil company said the cuts follow slower-than-expected global growth in commercial EV fleets, confirming a report from the Reuters news agency.

US rental giant Hertz is among BP Pulse customers to have revised its strategy on battery cars, announcing in January that it would sell off 20,000 EVs as drivers stick with petrol and diesel models. Other Pulse fleet clients include Uber and Royal Mail.

April 15 also brought the news that two of Tesla’s most senior executives were departing. Drew Baglino, one of the company’s leading engineers, resigned after 18 years with the business. The company’s public policy head, Rohan Patel, is also departing, Bloomberg reported.

Confirming his departure on Twitter, Mr Baglino said he would “always have a warm spot for the people of Tesla and Tesla products”.

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.

Tesla has yet to comment on the latest redundancies. In a post on Twitter, however, Mr Musk said: “About every [five] years, we need to reorganise and streamline the company for the next phase of growth.”

The billionaire, 52, has a reputation for firing underperforming staff and making deep job cuts, although the scale of Monday’s redundancies overshadows previous Tesla layoffs. Dan Ives, an analyst at Wedbush Securities, said there were “markedly more cuts than usual”.

He said: “Demand has been soft globally and this is an unfortunately necessary move for Tesla.”

In an 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.”

As well as tepid demand, the company 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.

The cheapest model from BYD on sale in the UK starts at around £25,000, compared to Tesla’s £40,000 Model 3.

Mr Schmidt said Chinese carmakers were “putting more downward pressure on pricing”.

Shares in Tesla have dropped by almost a third so far this year and fell by more than 3pc in pre-market trading in New York on April 15.

Tesla, which has factories in the US, China and Germany, has been working to update its 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 the company is planning to cancel a low-cost electric car that would sell for around $25,000.

Responding to questions about cuts within its Pulsedivision, BP said its “EV ambitions have not changed” and that Pulse remains one of five growth areas intended to lead the group’s transition from a fossil fuel provider into a broader energy company.

A spokesman said the division will focus on rolling out fast-charging hubs located on motorways and other major travel arteries as it targets 100,000 charging points globally by 2030, up from 29,000 at the end of last year.

BP has already shut its home-charging EV business. The Pulse unit operates in 10 countries, including four – the UK, US, China and Germany – that it identifies as core markets.

Elon Musk to cut 14,000 Tesla jobs amid electric car slowdown (2024)
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