Tesla is facing a period of uncertainty. The company, which was able to kick-start an electric vehicle revolution with the help of CEO Elon Musk, is now dealing with dwindling sales and profitability issues.
The company’s recent headlines have been dominated by chaos. Sales are down, the cars are barely profitable, and Musk has been making significant cuts across the company. Tesla’s profit margin, once the envy of the industry, has been reduced to a mere 5.5 percent due to a series of heavy price cuts. This is significantly lower than the average automaker’s profit margin of 8.9 percent last year.
In an attempt to offset this decline, Tesla has been making its cars cheaper to build. This includes stripping content from cars to reduce the cost of assembly. However, some of these changes have raised concerns. For instance, Tesla has abandoned the radar and ultrasonic sensors that are considered necessary by others in the industry for building partially automated cars. Instead, the company is now relying solely on optical cameras. This decision has led to recalls of both of Tesla’s driver assists following numerous crashes and at least 13 deaths.
In a surprising move, Musk recently laid off more than 10 percent of his workforce. This included key executives responsible for the Supercharger network and new vehicle development. Despite the turmoil, Musk remains optimistic about the future of Tesla, pinning his hopes on the development of robotaxis. However, this ambition will require the cooperation and approval of state and federal authorities, a task made more difficult by the recent dissolution of the company’s public policy team.
As Tesla navigates through these challenges, the question remains: Can things be turned around at Tesla, or is this the beginning of the end? Only time will tell.
Read more at: arstechnica.com