Things are not going well for Tesla.
On Monday, the world's largest electric car maker told employees it would lay off more than 10% of its workforce and lay off two senior executives. They said they were leaving.
Earlier this month, Tesla announced a surprising sales decline, selling 387,000 cars globally in the first quarter, down 8.5% from the same period last year. The company's shares have fallen more than 35% this year, including a 5.5% drop on Monday. Tesla CEO Elon Musk seems strangely indifferent to the company's slump and preoccupied with other matters.
Tesla remains the largest electric vehicle manufacturer and is credited with almost single-handedly creating the EV sector. As Tesla went, so did the industry.
However, in a surprisingly short period of time, the electric vehicle business appears to have become independent from Tesla.
Automakers in the U.S., Korea, China, and Europe all have large, durable EV product lines with growing sales. Ford sold 20,223 electric vehicles in the first quarter of this year, an 86% increase compared to the same period last year, becoming the second best-selling electric vehicle brand in the United States.
BMW said it supplied 82,700 pure electric vehicles globally in the first three months of this year. This is a sharp increase from the same period last year. And in China, where Musk helped build the market for electric vehicles and the expertise to produce them, Tesla is losing its edge over its Chinese rivals.
Overall EV sales have declined slightly in recent months. However, analysts expect sales to continue to grow over the long term. Phasing out gasoline cars is an effective and relatively easy way to reduce global warming emissions. And policy developments around the world make it almost certain that most large automakers will go all-in on EVs in the next few years.
“The challenges of certain companies, such as Tesla, do not mean doom and gloom for the EV industry as a whole,” said Pete Slowik of the International Council on Clean Transportation. “We are where this transition is becoming a reality and we are seeing significant momentum from all global automakers.”
Tesla's Concerns
Tesla was the first car manufacturer to prove that a market for electric vehicles existed. This made it the world's most valuable automaker and prompted traditional automakers to enter the EV market. But Tesla has been slow to innovate recently.
They haven't released a new car in years. The company reportedly canceled plans for a low-priced model as competition intensified. The Cybertruck release was marred by issues. The long-promised fully autonomous driving mode remains elusive. And Musk, who is also the CEO of rocket company SpaceX and owner of social media platform X, has alienated many consumers with his polarizing behavior.
Tesla's market share of electric vehicle sales in the United States has decreased from 65% two years ago to 51% currently.
Many factors are at play, but at the root of Tesla's problems is the mercurial Musk. I was interviewed in Surreal Conversation in 2018, when the Model 3 production problems were at their peak.
Musk is an entrepreneur who has always experienced great change. These days, he's eschewing the traditional automaker strategy of offering incremental upgrades every year and launching a few new models every decade. Instead, he's betting on large-scale innovations, including the Cybertruck and especially its autonomous driving mode, to revive Tesla.
“He seems to be only interested in Mars exploration these days,” said my colleague Jack Ewing, who spoke with confidential sources about what goes on inside Tesla. “He seems bored with the idea of releasing an upgraded Model 3.”
That strategy could appeal to Musk's world-conquering ambitions. But that's not a winning formula in the car business, fueled by incremental updates and regular new model launches.
Tesla, which does not have a media relations department, did not respond to a request for comment.
Acceleration
Recent policy changes make it almost certain that the EV market will continue to grow. Last month, the Biden administration finalized rules that effectively force automakers to make most new cars and light trucks sold in the U.S. fully electric or hybrid by 2032. Currently, only 7.6% of new vehicle sales in the U.S. are EVs.
In Europe, China and other countries around the world, governments have introduced policies to promote the adoption and production of electric vehicles.
Plus EVs are going to get a lot better. Batteries are expected to become lighter and more powerful, with improved range and lower prices.
These developments will make it easier than ever for new companies to gain market share. Especially if Tesla doesn't keep up with the latest features or releases new models.
Tesla isn't going away anytime soon. It remains the largest EV seller in the U.S., worth 10 times more than Ford. Every major automaker in North America has agreed to adopt Tesla's charging standards, and Tesla has given no indication that it is slowing down its pace of building chargers.
But without new innovations – new models, longer ranges, new features, and drastic price cuts – Tesla will be at risk of being left behind in the industry it helped create.
The global coral crisis may have already begun
The world's coral reefs may be in the midst of the most widespread global bleaching event ever recorded, the National Oceanic and Atmospheric Administration and international partners announced Monday. Extremely high ocean temperatures are the cause.
Bleaching occurs when corals become so stressed that they lose the symbiotic algae they need to survive, my colleague Catrin Einhorn explained. Bleached corals die if the surrounding water is too hot for too long.
This is the fourth global bleaching event on record, but scientists expect it to affect more coral reefs than any other. They will know for sure in a week or two.
As Catrin writes, coral reefs nurture about a quarter of marine life at some point in their life cycle, supporting fish that provide protein for millions of people and protecting coasts from storms.
Some scientists are trying to “assist evolution” to give vulnerable wildlife, like coral reefs, a chance, my colleague Emily Anthes writes. For example, in 2015, scientists hybridized colonies from different latitudes to create corals with greater heat tolerance.
Many conservation groups worry that these interventions will only hinder the broader solutions needed to curb the extinction crisis, especially climate change.
— Manuela Andreoni
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