Once hailed as a trailblazer, Tesla is now grappling with several obstacles. Since its inception in 2003, the company has transformed from a tech newcomer to a renowned car manufacturer, investing billions in clean energy initiatives and experiencing a remarkable surge in valuation. However, recent times have proven challenging for the electric vehicle (EV) giant as it contends with declining car sales, stiff competition from Chinese brands, and setbacks surrounding its highly anticipated Cybertruck.
To improve efficiency and reduce costs, Tesla has implemented multiple layoffs, resulting in a 10% reduction of its global workforce across various departments. Furthermore, the company shocked many by dismissing the team responsible for its supercharger network.
These cost-cutting measures come as dwindling sales have impacted Tesla’s revenue and profits, causing its share price to plummet by over a quarter since the beginning of the year. Despite these setbacks, Tesla remains a dominant force, commanding over 50% of the US electric vehicle market and attracting retail and institutional investors.
As of April 2024, Tesla has emerged as the most actively traded stock on the Nasdaq exchange, leading in both share and dollar volume.
Tesla burst onto the scene in 2012 with the launch of its Model S, challenging the prevailing notion that electric cars were lackluster and inconvenient. The Model S defied expectations, boasting impressive power, sports car-like performance, and a range of up to 265 miles on a single charge. While the luxury vehicle came with a hefty price tag, starting at $57,000 in the US, it made a striking statement in the market.
In 2017, Tesla underwent a name change from “Tesla Motors” to “Tesla, Inc.,” reflecting its evolving portfolio of products. CEO Elon Musk expressed his vision for the company to become a comprehensive energy solution provider across multiple sectors.
Since the debut of the Model S, Tesla has introduced four additional models, including the Model X SUV, the more affordable Model 3 and Model Y, and the groundbreaking Cybertruck. The company has expanded its manufacturing footprint, establishing expansive factories in Shanghai and Berlin and its original facility in Fremont, California, and other locations across the US. With the delivery of 1.8 million cars last year, Tesla has firmly established itself as a key player in the mass-market automotive sector.
As the electric vehicle market has matured, Chinese policymakers have actively promoted the development of EVs to secure a significant global market share. This has led to the rapid rise of brands like BYD, which surpassed Tesla as the world’s largest electric car manufacturer by the end of last year.
Simultaneously, subsidies aimed at supporting EV purchases have been scaled back in many regions worldwide, contributing to a slowdown in the exponential growth of EV sales observed in recent years. These market dynamics, coupled with pricing adjustments by manufacturers, have posed significant challenges for Tesla.
Facing a challenging market environment and a shift in consumer sentiment, Tesla is seeking ways to regain its momentum. CEO Elon Musk is placing his bet on driverless robot taxis, envisioning a future where Tesla reclaims its crown.
Musk has long discussed the potential of achieving full autonomy, even pledging a million Teslas equipped to operate as robotaxis within a year in 2019. However, the reality falls short of expectations, as Tesla’s “Full Self-Driving” package still requires driver attentiveness.
To stimulate car sales, Tesla is currently offering discounts, and to streamline operations, the company has implemented a 10% reduction in its global workforce.
