Layoffs, declining sales, an uncertain future, a distracted boss – all these factors seem to signal a company in serious trouble. Just like its polarizing electric pickup, the Cybertruck, Tesla seems to be stuck in a race towards the abyss, with the accelerator pedal pressed to the floor, without realizing that the road ahead is under construction.
Head, ready to go: collapse in sales
Earlier this month, Tesla reported the first year-over-year sales decline in four years, a sign of troubled waters on the horizon. The company's shares have collapsed by more than 40% since the beginning of the year, with a decline of 13% in the last week alone. The icing on the cake, so to speak, is that the earnings report is expected to include Tesla's lowest profit margins in six years, a sign that continued aggressive price cuts continue to take a toll.
That's not all, of course. Last week Tesla it laid off more than 14.000 employees, 10% of its global workforce which could reach 20%, according to Bloomberg. One more: since hope is always the last to die, it must be said that Musk's was placed in the company's next economical electric car, the $2 “Model 25.000”. The project has been cancelled: all the chips at this point seem to be oriented towards the autonomous robotaxi service that Tesla should launch in the summer.
Leadership in question and Tesla in fibrillation
Contrary to what his detractors say, I don't believe Musk has ambitions to conquer the world. I can't say, however, that he doesn't give the full impression of it. At the last shareholder meeting, he introduced the idea of a “Fully Sustainable Earth” and positioned Tesla (and himself) as the most qualified for this mission.
The feeling is that it's a way to buy time, waiting for (?) results to arrive from the Cybertruck and come on Optimus robot. A little to attract the interest of investors, and above all to promise handsome profits on the quality of those milled in recent years. Also because the fight out there has become truly ruthless.
Growing competition
Let's do a little reality check: this is not a "thesis" article and obviously everything is not bad. Tesla remains the world's most valuable automaker by market capitalization about 468 billion dollars. It's still the biggest name in electric vehicles, with 51% market share in the United States, according to Cox Automotive. But this data that's down from 65% in 2022, as more automakers beef up their electric vehicle lineups with viable alternatives and Tesla's competition heats up.
Tesla's grip on the electric vehicle market, in short, is slipping. If Musk is unable to articulate a clear, positive vision for Tesla, he could slide even further. The tycoon was the first to demonstrate, and long before others, that there was a market for electric vehicles. But it is becoming slow to innovate. And his leadership was called into question, especially when he became "distracted" between new companies and new projects.
Tesla, what happens now?
Tesla's big bets are a little out of breath. The launch of the Cybertruck was marred by problems, culminating in hasty recalls. Same fate for Tesla's driving assistance systems, Autopilot and Full Self-Driving.
It is a turning point for the company: the risk is to transform the dream of an electric revolution into a nightmare for its investors. The future is yet to be written, but Tesla is seriously at risk of being electrocuted.
