May 5, 2024 08:46 AM
Can things be turned around at Tesla, or is this the beginning of the end?
https://arstechnica.com/cars/2024/05/cha...d-layoffs/
INTRO: No car company in recent years has been able to generate more news headlines than Tesla. Its original founders were among the very first to realize that lithium-ion laptop cells were just about good enough to power a car, assuming you put enough of them in a pack, and with critical funding from current CEO Elon Musk, the company was able to kick-start an electric vehicle revolution. But those headlines of late have been painting a picture of a company in chaos. Sales are down, the cars are barely profitable, and now the CEO is culling vast swaths of the company. Just what is going on?
Always erratic, Musk's leadership has nevertheless seen the company sell electric cars in volume, profitably. What's more, Musk has at times been able to inspire faith in and devotion to his company's products in a way that makes the late Steve Jobs look like a neophyte—after the Model 3 debuted in 2016, 450,000 people gave $1,000 deposits to Tesla for a product that wouldn't go into production for at least 18 months.
Of course, that example also illustrates a long-running concern with the company and Musk's investment-attracting pitches: overhyping and underdelivering. By 2018, more than one in five reservation holders wanted a refund after cheaper models were delayed and delayed.
But things have been on a bit of a downward slide recently. After having the long-range EV market almost to itself for some years, there's now stiff competition from car companies in the US, Europe, and China. That has caused Tesla to engage in a prolonged series of price cuts that have seen the company's profit margin—once the envy of the industry—reduced to a measly 5.5 percent. (The average automaker profit margin last year was 8.9 percent.)
Advertisement
Tesla has tried to stave off that decline by making its cars cheaper to build. Where possible, the company has stripped content from cars to reduce the cost of putting them together. Some of that is merely annoying to the driver; turn signals that were stalks are now capacitive buttons on the steering wheel. Some is more serious. Tesla has abandoned the radar and ultrasonic sensors that everyone else trying to build partially automated cars, let alone fully autonomous ones, think are necessary. Instead, the company is relying on optical cameras alone. And that has caught up with it—both of Tesla's driver assists have been the subject of recalls after numerous crashes and at least 13 deaths.
But this week has been a weird one, even for experienced Tesla watchers... (MORE - missing details)
https://arstechnica.com/cars/2024/05/cha...d-layoffs/
INTRO: No car company in recent years has been able to generate more news headlines than Tesla. Its original founders were among the very first to realize that lithium-ion laptop cells were just about good enough to power a car, assuming you put enough of them in a pack, and with critical funding from current CEO Elon Musk, the company was able to kick-start an electric vehicle revolution. But those headlines of late have been painting a picture of a company in chaos. Sales are down, the cars are barely profitable, and now the CEO is culling vast swaths of the company. Just what is going on?
Always erratic, Musk's leadership has nevertheless seen the company sell electric cars in volume, profitably. What's more, Musk has at times been able to inspire faith in and devotion to his company's products in a way that makes the late Steve Jobs look like a neophyte—after the Model 3 debuted in 2016, 450,000 people gave $1,000 deposits to Tesla for a product that wouldn't go into production for at least 18 months.
Of course, that example also illustrates a long-running concern with the company and Musk's investment-attracting pitches: overhyping and underdelivering. By 2018, more than one in five reservation holders wanted a refund after cheaper models were delayed and delayed.
But things have been on a bit of a downward slide recently. After having the long-range EV market almost to itself for some years, there's now stiff competition from car companies in the US, Europe, and China. That has caused Tesla to engage in a prolonged series of price cuts that have seen the company's profit margin—once the envy of the industry—reduced to a measly 5.5 percent. (The average automaker profit margin last year was 8.9 percent.)
Advertisement
Tesla has tried to stave off that decline by making its cars cheaper to build. Where possible, the company has stripped content from cars to reduce the cost of putting them together. Some of that is merely annoying to the driver; turn signals that were stalks are now capacitive buttons on the steering wheel. Some is more serious. Tesla has abandoned the radar and ultrasonic sensors that everyone else trying to build partially automated cars, let alone fully autonomous ones, think are necessary. Instead, the company is relying on optical cameras alone. And that has caught up with it—both of Tesla's driver assists have been the subject of recalls after numerous crashes and at least 13 deaths.
But this week has been a weird one, even for experienced Tesla watchers... (MORE - missing details)