Tesla Faces Quarterly Delivery Decline Amidst EV Market Shift

The allure of EVs is fading, leading conventional automakers to scale back their ambitious EV plans. Telsa, in particular, saw quarterly deliveries decline in the first quarter of 2024. This marks the first downturn since the pandemic began.

With 386,810 vehicles delivered, the numbers reflect a 20% drop from the fourth quarter of 2023 and a 9% slide from the same period in 2023. Meanwhile, Tesla produced nearly 50,000 more vehicles than it delivered.

In an effort to bolster revenue, Tesla has implemented several measures. Firstly, the company now mandates that employees showcase the company’s Full Self-Driving (Supervised) system upon delivery. While advanced, it’s worth noting that this system does not render the vehicle fully autonomous and is offered as a costly add-on, not included by default with Tesla’s cars.

Moreover, Tesla has recently slashed the monthly subscription price for Full Self-Driving (FSD) from $199 to $99. This significant reduction hints at lower-than-desired uptake of the service. However, the price cut presents an opportunity for Tesla to potentially expand its subscriber base, thereby boosting recurring revenue.

Tesla Laying Off Over 10% of Staff Globally 

To navigate plummeting sales and intensifying competition in the electric vehicle (EV) market, Tesla is undertaking significant restructuring. An internal memo indicates a workforce reduction surpassing 10%, highlighting Tesla’s endeavors to enhance productivity and reduce costs.

CEO Elon Musk, commenting on the reorganization, stated, “Every five years, we need to reorganize and streamline the company for the next phase of growth,” in a post on X.

About every 5 years, we need to reorganize and streamline the company for the next phase of growth

— Elon Musk (@elonmusk) April 15, 2024

Alongside the workforce reduction, two prominent figures, battery development chief Drew Baglino and vice president for public policy Rohan Patel, announced their departures. This has drawn mixed reactions from investors.

Baglino, a seasoned Tesla veteran and key leadership member, bid farewell amidst concerns about the company’s trajectory. Scott Acheychek, CEO of Rex Shares, described the layoffs as strategic, contrasting with Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, who labeled the departure of senior executives as a “larger negative signal” regarding Tesla’s growth prospects.

With a focus on cost optimization and market expansion, Tesla faces a critical juncture in its journey toward sustainable growth amidst a dynamic and competitive landscape.