Tesla Lays Off Hundreds of Autopilot Workers in Latest Staff Cut(bnnbloomberg.ca) |
Tesla Lays Off Hundreds of Autopilot Workers in Latest Staff Cut(bnnbloomberg.ca) |
I doubt any cuts could yield the type of profitability that wall street expects at the current valuation.
"Both Berlin and Austin factories are gigantic money furnaces right now. OK? It should be like a giant roaring sound which is the sound of money on fire," Musk said in the interview with Tesla Owners Silicon Valley, which was recorded on May 30 and published Wednesday.
"Berlin and Austin are losing billions of dollars right now because there's a ton of expense and hardly any output. Getting Berlin and Austin functional and getting Shanghai back in the saddle fully are overwhelmingly our concerns. Everything else is a very small thing basically."
Musk said the Texas factory is "losing insane money" at the moment because of troubles ramping up production of cars with the so-called 4680 battery, Tesla's latest technology. Meanwhile, the tools to make cars for the traditional 2170 batteries are "stuck in a port in China."
Since the interview, Musk has announced plans to reduce Tesla's salaried workforce by 10% in the next three months. But the company plans to increase the number of hourly employees. Tesla's layoffs would affect around 3.5% of its overall workforce, Musk said this week.
Source: https://www.cnbc.com/2022/06/23/musk-says-tesla-berlin-and-a...
And why do you think that orders are falling off of a cliff exactly?
Tesla has grown incredibly fast, they have 100k employees, they have a terrific balance sheet and are at no risk of bankruptcy.
For the last 10 years people seem to always lay out this awful scenario for Tesla, meanwhile they are growing in sales incredibly quickly, literally the quickest ever.
Any evidence or are you just making up things? Because that is literally the opposite of pretty much everything we know about Tesla orders.
> Cybertruck pre-orders given that Ford and Rivian have beaten them to market and both those products are drawing rave reviews.
That makes no sense. Cybertruck pre-orders going away (if that is case, and I question that) would not impact its current financials.
The interest rates will likely reach 3% by the end of the year, and may need to go all the way to 8% to have a meaningful effect on the inflation.
Every measurable economic metric suggests we are rolling full speed into a recession. And driving your old car for another year or two instead of upgrading to that nice luxury EV is one of the first things many people would do.
So, their sales will likely plummet. Taking on more debt will become quite expensive, and the share prices will very likely correct by a lot. They are doing everything well, if you ask me.
"But with help from the Treasury and from Social Security’s actuaries, I’ve come up with a reasonable estimate of that added interest cost. By my math, the Fed’s higher rates will increase the federal government’s interest costs by about $128 billion a year."
That may not sound like much, given the trillions of dollars of investment wealth that have been vaporized by the Fed’s higher rates. Or given the $1.4 trillion deficit President Biden’s proposed budget projects for this year.
But $128 billion is in the vicinity of the $133 billion total that the Biden budget is seeking for the Energy, Homeland Security and Agriculture Departments.
Or is just $2 billion below the total that the Biden budget proposes to spend for the Interior Department, the Labor Department, the Commerce Department, the Treasury, the Environmental Protection Agency, the National Aeronautics and Space Administration, the National Science Foundation, the Social Security Administration and the Corps of Engineers. Combined."[1]
"Already, the federal government spends $330 billion per year, or $2,207 per taxpayer, on interest payments – more than on food stamps and disability insurance combined. And two-thirds of our debt is slated to roll over in the next five years, likely into higher interest rate bonds.
For every 1 percentage point increase in interest rates above projections, deficits grow by $2 trillion over a decade; that’s on top of the nearly $13 trillion in projected borrowing over the next decade."[2]
[1]: https://www.washingtonpost.com/business/2022/06/27/fed-rate-...
[2]: https://www.crfb.org/press-releases/feds-interest-rate-hike-...
You don't even know what you are saying about Tesla. Take on more debt? Why would they do that? They have 17 billion dollars in cash on hand, and paid off a lot of their pre existing debt.
Even if they want to build a new gigafactory they don't need any more funding. They smartly sold more shares when the stock was insanely high and got a huge infusion.
That's the reason.
My sympathies with the folks laid off, but do American firms still do data labeling in-house? I assume most of it is out-sourced via Scale or other vendors to eventually India, Vietnam etc.
Recently NY state sold off all the solar panel equipment, and Panasonic pulled out of the partnership. Tesla hired minimum wage data taggers to avoid fines under the job creation agreement.
One of the worst public subsidy scams in state history if you ask me, alongside Scott Walker's Foxconn giveaway in Wisconsin. I wish state governments would collectively agree to stop falling for this.
https://www.investigativepost.org/2021/12/28/tesla-reaches-i...
Firing most of their data-cleaning & labeling capacity isn't going to be good for their car efforts, but I suppose if things are that bad at Tesla now, it's better to fire to cut expenses to the bone, and rehire much later once the storm is past...
- Elon Musk (2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022)
Tesla has grown incredibly quick, all while essentially having the electric car market to themselves. That is no longer true---their market share will inevitably shrink, because it has nowhere to go but down. If the overall market growth slows---say, because of inflation and a recession---then this could be a problem for a company that has been staffing for breakneck growth and now sees that growth flattening. I'm not saying Tesla is going bankrupt, but I do believe that having two major competitors beat it to market in a strategic segment like trucks is a problem for Tesla, they are seeing that problem play out in projected sales, and they are trimming the payroll to rightsize for more challenging conditions.
The annual budget is about $6 trillion.
They certainly can eat another $128B or even $500B.
After all, when inflation is higher than interest rates, the real yield is negative.
Whether pursuing this mandate inconveniences the govt or not should not be a concern (at least in theory).
There is literally no place for whims and feelings at a company that big.
I do, I worked for VAG during Dieselgate and got a first hand look at the sheer monstrosity of a Megacorp that it is when dealing with the processes, and actually it has a long history of doing just that. In fact the way they got the engineers on board for the cheat device wasn't through a committee or board, it was upper management intimidating engineers to comply by way of threatening their continued employment there.
Furthermore, they could have gotten away with it after the first alarms were sounding off that they were being investigated, but they decided to keep doing it anyway.
It's really eye opening after having gone through the chaos of it all it first hand working within the TDi buy back program and dealing with Bosch and VW corporate in the early phases of the program, while doing a customer facing role and then reading Jack Ewig's book [0] now.
As for Tesla lay offs, they do this when they expand their lineup, it's like a calibration thing at this point.
Right after Tesla model 3 roll out which failed to meet its targets in '17 [1] which incidentally was days after my first round of interviews at Fremont they started to lay people off. These layoffs extended to 2018 ultimately led to shedding off 9% of total workforce by 2018 [2] when M3 ramp up was the only thing that could stop the never ending hemorrhaging that was likely to bankrupt Tesla if they didn't. I know this because that was the time that they asked me if I was still interested in the role and if I'd want to re-apply and take another round of interviews. I declined and told them I'd made efforts since then to make my way to SpaceX instead, the recruiter understood and kindly wished me well.
0: https://www.amazon.com/Faster-Higher-Farther-Volkswagen-Scan...
1: https://www.cnbc.com/2017/10/17/tesla-firings-former-and-cur...
Tesla surely meets that threshold as well.
I would be very surprised if Tesla optimized for optics here.
Tesla total liabilities for the quarter ending March 31, 2022 were $31.091B, a 6.81% increase year-over-year.
So they may have paid off a lot of their pre existing debt and then went and borrowed even more money on different terms.
Meanwhile, Tesla is very profitable over the last few years and is very profitable on a per car basis. Not to mention the other tech that they are working on.
P/E is always going to be relative to growth. tons of companies have infinite P/E and are hemorrhaging money. Tesla is not.
Hopefully Tesla can stay competitive and keep pushing the tech forward, but I think they've got some tough times ahead.
Hyundai is the lucky one so far.
That's not at all certain when buying and EV.
> but it looks to me like they're losing a lot of their first-mover advantages now
That's what people have been saying since 2014 and Tesla has just continued to grow.
> and they'll probably be losing some margin
Given that they have improved prices quite a bit and still have lots of order backlog, I would suspect the opposite.
Maybe total operational margin will be down because of Berlin and Texas factories, but automotive margin is unlikely to go down.
Part of the reason Ford and others can even compete is that Tesla open sourced their patents. Ford and other's electric cars are being built on the house that Tesla built.
https://www.vennershipley.co.uk/insights-events/does-teslas-...