Tesla shares fall after Musk cuts about 500 jobs at Supercharger team

Tesla Supercharger stations near a Circle K gas station in Austin, Texas on April 23, 2024.

Brandon Bell | Getty Images

Tesla shares fell nearly 6% on Tuesday after news that CEO Elon Musk was pushing for more job cuts at Teslaaffecting approximately 500 employees on its Supercharger team.

Shares closed at $183.28 and are now down 26% for the year.

According to The information, Musk sent an email to Tesla executives overnight announcing the departures of key executives, including Senior Director of EV Charging Rebecca Tinucci and Director of Vehicle Programs Daniel Ho. In the email, Musk also expressed concern that Tesla management had not cut the company’s workforce more quickly at his direction.

Several employees whose roles were cut and one person who still works at Tesla in California confirmed to CNBC the details of the ongoing reorganization, speaking on condition of anonymity to discuss sensitive matters. Other laid-off Tesla employees have made public posts about Tesla downsizing the Supercharger team.

Cutting that group, Tesla revealed it is limiting the expansion of its Supercharger network in the US. The move comes after Tesla struck partnerships with Ford, GM and other industry players by ensuring that they will manufacture vehicles using the Tesla NACS (North American Charging Standard) for compatibility with Tesla charging stations and allowing customers of these companies to use Tesla stations.

The layoffs, which are taking place now, are part of a massive cost-cutting measure by Tesla after a 9 percent drop in revenue in the first quarter of this year, the steepest annual decline since 2012. Profits were cut in half in the first three months of 2024 as Tesla cut cars and issued incentives to boost demand.

Current and former employees told CNBC that Tesla began laying off some employees as early as January, with larger layoffs ramping up this month. They said some colleagues who thought their jobs were safe received termination notices on Friday and Tuesday.

Tesla did not warn investors about withdrawing its plans to build charging infrastructure. The company also did not give notice to some charging network partners, including small and medium-sized businesses that install and maintain EV charging equipment for Tesla at key locations in the United States.

Andres Pinter, co-CEO of the Supercharger Bullet EV network contractor, told CNBC: “My team woke up to a sharp kick in the pants this morning. Emails we sent to twenty or more different Charger Build contacts were rejected with the same automated response, “This email address is no longer valid. All future emails sent to this address will not be received.”

Pinter said he thinks “it will take years for other charger networks to catch up,” but Tesla abandoning a near-term plan to aggressively expand in the U.S. leaves room for other players.

Musk wrote to X that “Tesla still plans to expand the Supercharger network, but at a slower pace for new locations and more focus on 100% uptime and expansion of existing locations.”

Tesla makes money from environmental credits and charging session fees and already operates about one in three public electric vehicle charging stations in the US

Transportation is responsible for 25 percent of carbon emissions from human activity worldwide, according to the nonprofit’s estimates International Clean Transportation Council. While Musk has recently talked about AI initiatives at Tesla and its quest to develop self-driving technology, the company reiterated in its annual report announced this week that its mission is to “accelerate the world’s transition to sustainable energy.”

Tuesday’s drop in Tesla shares followed a 15% gain on Monday, its best trading day of the year. The rally came after news reports that Musk’s visit to China had led to a major deal with Baidu to map technologies that could power future self-driving software in the country for Tesla.

Tesla has long promised, but has yet to deliver, autonomous vehicles.

In a note to investors this week, JL Warren Capital founder Junhen Li wrote that there were too many “missing critical details” to justify Monday’s gains. “We believe the adoption rate and incremental revenue from localized FSD – assuming a similar level of autonomy as TSLA’s latest v12 – will be significantly lower in China than in the US.”

Xpeng, Nio and other EV manufacturers currently offer Tier 2 systems that are given out to buyers as incentives in China.

WATCHING: Tesla’s tentative self-driving deal in China still isn’t enough to make it ‘magnificent’

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