Tesla shakes up staff amid revenue decline

Elon Musk has made significant staff changes at Tesla, letting go of two senior executives and announcing plans for further job cuts. The decision comes in response to decelerating sales and an aggressive price war, resulting in Tesla's first quarterly revenue drop since 2020.

Rebecca Tinucci, the senior director of Tesla's Supercharger business, and Daniel Ho, head of the new vehicles program, have been asked to leave the company by Tuesday, along with their respective teams. This will include approximately 500 employees who work in the Supercharger group.

According to reports, Musk explained in his email to his employees, "Hopefully these actions are making it clear that we need to be absolutely hardcore about headcount and cost reduction. While some on exec staff are taking this seriously, most are not yet doing so."

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The precipitous nature of the layoffs has caught many industry officials and analysts off guard, especially after Tesla’s recent plans to open its Supercharger network to other electric vehicle manufacturers.

Tesla's decision to open its network to competing EV manufacturers including GM, Ford and other automakers was applauded by U.S. President Joe Biden and attracted federal subsidies to expand the reach of its North American Charging Standard (NACS) system.

GM and Ford, in separate statements, shared that they are not altering their plans to equip their EVs with connectors that will allow drivers of Chevrolet, Cadillac or Ford brand EVs to recharge at Tesla stations. "We are continuing to monitor the situation regarding changes to the Supercharger team and the potential impacts with no further comments or updates at this time," GM said.

Andres Pinter, co-CEO of Bullet EV Charging Solutions, a supplier to the network, said, “Tesla has already been awarded money under the federal government's NEVI program, he stated, referring to the National Electric Vehicle Infrastructure formula program to provide funding to states to deploy EV charging networks…There's no way Mr. Musk would walk away from effectively free money. It may be possible Musk will reconstitute the EV charger team in bigger, badder, more Muskian way."

According to media reports, despite the job cuts, Tesla intends to continue expanding its Supercharger network, although at a slower pace, “with more focus on 100% uptime and expansion of existing locations."

While some industry experts are speculating on the long-term implications of the layoffs, others are confident that Tesla will eventually restructure its EV charger team to make the most of government funding and scale up its charging infrastructure.

Seven large automakers, including Mercedes, GM, Stellantis, Honda, BMW, and Hyundai-Kia formed a joint venture last year called ‘Ionna’ to develop a fast-charging network to compete with the Tesla Supercharger network.

Earlier this month, two other senior leaders, Rohan Patel who led Tesla’s public policy team and battery development chief Drew Baglino, announced their departures. Tesla had also laid off more than 10% of its workforce at the time.

Even after a surge over the past week, Tesla shares are down about 26% for the year. Morningstar analyst Seth Goldstein commented, "Tesla is looking to right size its (capital spending) and operating expenses over the next couple of years as the company is in a slower growth phase".