Good Times Over For Tesla? A Quick Look Into Elon Musk EV Venture's Journey So Far

In the past few weeks, Tesla has announced several rounds of layoffs, firing 10 per cent of its workforce worldwide from several departments

Declining sales have impacted Tesla’s revenue and adversely affected its profits ( Image Source :Getty )

Once a shining star, Tesla is now facing numerous challenges. Tesla was launched in 2003, and over a decade, it transitioned from a technology newcomer to a widely recognised car manufacturer. It allocated billions towards its clean energy ventures and experienced a remarkable surge in its valuation. However, in recent times, the EV maker has been facing difficult situations due to declining car sales, stiff competition from Chinese brands, and issues surrounding its highly anticipated Cybertruck.

In the past few weeks, Tesla has announced several rounds of layoffs, firing 10 per cent of its workforce worldwide from several departments. These layoffs were part of a restructuring plan aimed at improving efficiency and reducing costs. However, the EV maker did not stop there. After firing a substantial number of employees, it decided to fire even more, resulting in the layoffs of the entire team responsible for its supercharger network.

Declining sales have impacted Tesla’s revenue and adversely affected its profits. Since the beginning of the year, its share price has plummeted by over a quarter. However, Tesla is an immensely influential entity, having over 50 per cent of the US electric vehicle market. Its stock holds considerable appeal among both retail and institutional investors. 

As of April 2024, Tesla emerged as the most actively traded stock on the Nasdaq exchange, leading in both share and dollar volume.

Rise Of Tesla

Tesla launched its Model S during a time when electric cars were widely termed as sluggish, unexciting, and inconvenient. They came with only limited options for the customers. Tesla’s launch was a breakthrough in the market at that time in 2012 because the Model S boasted impressive power, delivering sports car-like performance, and offered a range of up to 265 miles on a single charge. While it came with a hefty price tag, starting at $57,000 in the US for the base performance model, the care made a statement.

Tesla Motors To Tesla

In 2017, Tesla had undergone a name change from "Tesla Motors" to its present designation, "Tesla, Inc.," reflecting a broader portfolio of products. Through various public communications and declarations, Elon Musk expressed his aspiration for the company to evolve into a comprehensive energy solution spanning multiple sectors in the future.

Since the launch of Model S, Tesla has introduced four additional models, comprising the Model X SUV, the "budget-friendly" Model 3 and Model Y, and the innovative Cybertruck. The company has expanded its manufacturing footprint significantly, boasting expansive factories in Shanghai and Berlin alongside its original facility in Fremont, California, and several other locations across the United States. With an impressive delivery of 1.8 million cars last year, Tesla has firmly cemented its position as a prominent player in the mass-market automotive sector.

Evolution Of The EV Market Around The World

In the meantime, Chinese policymakers have long viewed the emergence of electric vehicles (EVs) as an opportunity to secure a significant share of the global market, actively promoting their development. This drive has led to the rapid ascension of brands such as BYD, which surpassed Tesla in claiming the title of the world's largest electric car manufacturer by the end of last year.

Simultaneously, as the EV market has matured, subsidies aimed at assisting consumers in purchasing these vehicles have been scaled back in many regions worldwide. This adjustment may partially account for the recent slowdown in the exponential growth of EV sales observed in recent years, prompting manufacturers themselves to adjust their pricing strategies. These factors have posed multiple challenges for Tesla.

Trouble Brewing For Tesla

With harsh market conditions and consumers drifting away from Tesla, will the EV maker be able to regain its crown? It seems like Musk is putting his bet on the driverless robot taxis, which will not only help them regain their momentum but also give them back their lost crown. He has long been discussing the potential of achieving full autonomy. In 2019, he pledged that within a year, there would be a million Teslas on the road equipped to operate as robotaxis. However, the reality is far different; Tesla's "Full Self-Driving" package falls short of its name, as it still operates as a "hands-on" system, mandating that the driver remains attentive at all times.

As of now, Tesla is offering discounts to boost car sales, and in an effort to cut overall costs, the firm has laid off 10 per cent of its employees worldwide.