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Today, the media reported that Tesla has started a new round of layoffs. The layoffs are in Tesla's software, service, engineering and other departments, and it is reported that some employees received layoff emails over the weekend.

In fact, news of Tesla's layoffs has been endless since Tesla Musk announced 10 per cent global layoffs in mid-April.

A few days ago, it was also reported that Tesla's entire super charging team had been disbanded. According to a memo released by Mr Musk, two senior executives, Rebecca Tinucci, head of Tesla's supercharging team, and Daniel Ho, head of the new product, left with about 500 employees from the team. Musk has said that layoffs are mainly due to duplication of roles and job functions in some areas of the company, which can reduce costs and increase productivity and prepare for the next phase of the company's growth.

Tesla's layoff measures are also easy to understand. With the increasingly fierce competition in the electric car market, Tesla is no longer the only choice for consumers, and there has been a slowdown in sales growth. Of course, in order to strengthen their competitiveness, Tesla has also reduced prices many times this year, but there is still no great increase in sales. Relevant data show that in the first quarter of this year, Tesla's global sales were 386000, down 8.5% from the same period last year, below Wall Street's forecast of 449000.

In addition to the decline in sales, Tesla's financial situation in the first quarter is not optimistic. Tesla's operating income in the first quarter of 2024 was $21.301 billion, down 8.69% from the same period last year. Net profit in the first quarter was $1.13 billion, down 55.07% from the same period last year, below market expectations of $1.9 billion. Gross profit margin in the first quarter was 17.4%, down 1.9% from 19.3% in the same period last year. In order to boost sales, Musk also gave a good signal after releasing first-quarter results. Tesla will accelerate the launch of cheaper economic models and plan to launch them on the market in early 2025, even in late 2024. As soon as the news was released, it directly boosted Tesla's secondary market, and Tesla's share price rose more than 13% on the same day.

At the same time, Tesla once again opened the mode of price reduction. After announcing the layoffs, Tesla cut the price of Model 3, Model Y, Model S and Model X models sold in China by 14000 yuan. Among them, the price of Model 3 is reduced to 231900 yuan, that of Model Y is 249900 yuan, that of Model S is 684900 yuan, and that of Model X is 724900 yuan. The price of FSD's fully self-driving service has also been cut from $199 to $99 a month.

In addition, there has been news recently that, in order to cut expenses, Tesla has abandoned the next generation of "integrated die-casting" process and switched to a more mature three-piece casting method for the lower part of the car body. The data show that "integrated die casting" is an advanced manufacturing technology, which is mainly suitable for the production of car body parts. Through the use of a large press, a number of separate and scattered small parts at the bottom of the car body are die-cast as a whole. This process can save time, omit the welding steps and get a complete large part directly.

From Tesla's recent measures such as layoffs and price cuts, it is not difficult to see that Tesla's life is not easy as the car companies fight a price war in 2024. Take the Chinese market as an example, for Standard Tesla models emerge in endlessly, Tesla needs to seize more market share, it is not easy. In addition, compared with other car companies, Tesla's speed of innovation is relatively slow, and his market share is constantly shrinking. According to the data, Tesla's market share in China was 16% in 2021 and fell 8.2% to 7.8% in 2023. Tesla's dominant position in China's electric car market is being overtaken by other car companies.

In the context of poor sales, declining profits and market share being constantly swallowed up, Tesla carried out layoffs and other measures, undoubtedly in order to preserve strength to cope with the subsequent severe market competition. Of course, these measures can increase Tesla's sales and reduce costs to some extent, but the effect is far less direct than the introduction of cheaper models. The subsequent emergence of new models, or Tesla sales growth of a tipping point.

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