Seeking cost reductions. In the midst of a highly competitive and sluggish electric vehicle industry, Tesla CEO Elon Musk announced plans to lay off around 10% of the company’s present staff, or approximately 14,000 employees.
The revelation was originally reported by EV news outlet Electrek, and came in a Monday message from Musk to Tesla staff, in which he emphasized the need to find savings and meet his objective of making Tesla more “lean, innovative, and hungry for the next growth phase cycle.”
“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 wrote in an email acquired by Electrek.
While overall electric vehicle sales in the United States are increasing, the rate of increase has “slowed notably,” according to a Cox Automotive survey.
Tesla remains the dominating player in EV sales, but its proportion of new vehicle sales is declining in a market with an increasing number of manufacturers and vehicle options.
According to Cox, while the 268,909 electric vehicles sold in the United States in the first quarter of this year reflect a 2.3% volume rise over the same period last year, sales were down more than 15% from the fourth quarter of 2023. While Tesla sales fell, some other brands experienced big increases in EV sales to begin the year.
“Electric vehicle sales in the United States fell in Q1 2024, the first quarter-over-quarter decline since Q2 2020,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, in a research published last week.
“As expected, Tesla’s sales declined, altering broader market dynamics. However, a few brands experienced strong EV sales growth, exceeding 50% year on year.
Despite the slowing rate, Valdez Streaty believes the U.S. EV market will continue to grow.
“As we mentioned in January, we’re calling 2024 ‘the Year of More,'” Valdez Streaty added. “More new products, incentives, inventory, leasing, and infrastructure will boost EV sales this year.” Even so, we’ll see ups and downs as the industry transitions to electrification.”
Tesla sales fell 13% in the first quarter of 2024 compared to the same period last year, according to The New York Times, while the company’s global market share fell from 62% to 51%.
While Tesla sales fell in the first three months of 2024, Cox Automotive says that nine manufacturers, including BMW, Cadillac, Ford, Hyundai, Kia, Lexus, Mercedes, Rivian, and Vinfast, increased EV sales by more than 50% year on year over the same period.
Cox expects that EV sales will increase from 7.3% to 10% of all new car sales in the United States by the end of the year.