Earlier today, in an email to employees, Elon Musk confirmed plans to shed approximately 7 percent of the Tesla workforce. Noting the layoffs are a rightsizing after a 30 percent increase in staffing in 2018, Musk also confirmed his view that “the road ahead is very difficult.” Below you will find commentary from a few of our analysts.
Cox Automotive’s team of experts is expecting most automakers to take careful measure of their current operations and make adjustments as need. Tesla’s move today is not unique. The road ahead is getting more difficult, with the U.S. market forecast to slow from 17.3 million in 2018 to 16.8 million in 2019. Many factors are putting pressure on the industry, including tighten credit, higher interest rates, and continued threats of tariffs.
For insights on the auto industry, visit the Market Insights & Outlook section of the new Cox Automotive Newsroom. And, as always, if you have questions on this or other industry topics, please contact a member of the Cox Automotive PR team.
Michelle Krebs, executive analyst, Autotrader
“This year will be challenging for all automakers as we are forecasting a dip in new vehicle sales. It will be especially challenging for Tesla as it desperately tries to rack up more quarterly profits after having one in the third quarter, and it faces an onslaught of competitors in the next couple of years.”
Brian Moody, executive editor, Autotrader
“It has always been hard to make affordable electric cars, that’s why all car-buyers and tax-payers have to subsidize them through taxes and government incentives. Tesla should never have promised affordability in the first place. The real future for EVs is luxury cars like the Jaguar I-Pace and automated delivery and taxi services.”
Karl Brauer, executive publisher, Autotrader and Kelley Blue Book
“As Tesla attempts to transition from a niche brand to a volume, mainstream automaker, it is facing the same hurdles every other established car company must clear. First and foremost among those, a right-sized, efficient workforce that can produce vehicles at a consistent, sustainable profit.”