Tesla is in a bad spot.
The world’s largest electric carmaker on Monday told employees it would lay off more than 10 percent of its work force, and two senior executives said they were leaving.
Earlier this month Tesla announced a stunning drop in sales, delivering 387,000 cars worldwide in the first quarter, down 8.5 percent from the same time last year. The company’s stock has fallen more than 35 percent this year, including a 5.5 percent drop on Monday. Elon Musk, Tesla’s chief executive, appears strangely disengaged with the company’s stumbles and preoccupied with other pursuits.
Tesla is still the biggest electric vehicle manufacturer, credited with almost single-handedly creating the E.V. sector. As Tesla went, so went the industry.
But in a remarkably short period of time, the electric vehicle business appears to have untethered itself from Tesla.
American, Korean, Chinese and European carmakers all have big, durable E.V. product lines with growing sales. Ford sold 20,223 electric vehicles in the first quarter of the year, an increase of 86 percent from the previous year, making it the second best-selling E.V. brand in the U.S.
BMW said it delivered 82,700 all-electric cars around the world in the first three months of the year, up sharply from a year earlier. And in China, where Musk helped establish the market for electric vehicles, and the expertise to produce them, Tesla is losing its edge over Chinese competitors.
In recent months, total E.V. sales have softened a bit. But analysts expect long term sales to keep rising. Phasing out gas powered cars is an effective, and relatively easy, way to bring down planet warming emissions. And policy developments around the globe make it a near certainty that most big carmakers will be going all-in on E.V.s in the years ahead.
“The challenges with any particular company, Tesla or otherwise, doesn’t mean doom and gloom for the E.V. industry at large,” said Pete Slowik of the International Council on Clean Transportation. “We are at a place where this transition is real and we have significant momentum from every global automaker.”
Tesla’s woes
Tesla was the first carmaker to prove there was a market for electric vehicles. That helped make it the most valuable car company in the world, and prompted traditional automakers to jump into the E.V. market. More recently, however, Tesla has been slow to innovate.
It has not introduced a new car in years. The company reportedly canceled plans for a low-cost model in the face of rising competition. The Cybertruck release has been marred with problems. A long-promised fully self driving mode remains elusive. And Musk, who is also the chief executive of the rocket company SpaceX and the owner of social media platform X, has alienated many consumers with his polarizing behavior.
Tesla’s market share of E.V. sales in the United States is now 51 percent, down from 65 percent less than two years ago.
There are many factors at play, but at the root of Tesla’s troubles is the mercurial Musk, whom I interviewed in a surreal 2018 conversation during the depths of the Model 3 production woes.
Musk is an entrepreneur who has always taken big swings. These days, he is eschewing the traditional carmaker strategy of offering gradual upgrades each year and introducing a few new models each decade. Instead he is betting on big innovations, including the Cybertruck and especially self-driving mode, to revive Tesla.
“He only seems interested in Mars-shots these days,” said my colleague Jack Ewing, who has been speaking with sources privy to what’s happening inside Tesla. “He seems bored by the idea of coming out with an upgraded Model 3.”
That strategy may appeal to Musk’s world-conquering ambitions. But it’s not a winning formula in the car business, which is driven by incremental updates and the regular introduction of new models.
Tesla, which does not have a media relations department, did not reply to a request for comment.
Acceleration
Recent policy changes make it virtually certain that the E.V. market will keep growing. Last month the Biden administration finalized rules that will effectively force automakers to make a majority of new passenger cars and light trucks sold in the U.S. all-electric or hybrids by 2032. E.V.s make up just 7.6 percent of new U.S. car sales today.
In Europe, China and other countries around the world, governments have introduced policies designed to spur the adoption and production of electric vehicles.
What’s more, E.V.s are going to get much better, and soon. Batteries are expected to get lighter and more powerful, range is going to improve and prices will likely come down.
Those advances will make it easier than ever for new companies to gain market share, especially if Tesla isn’t keeping up with the latest features or introducing new models.
Tesla isn’t going away anytime soon. It remains the biggest seller of E.V.s in the U.S., and is worth 10 times as much as Ford. All of the major North American carmakers have agreed to adopt Tesla’s charging standard, and Tesla has not given any sign that it is slowing down its build out of chargers.
But without a renewed burst of innovation — whether it be new models, longer range, new features or radically lower prices — Tesla will be at risk of falling behind in the industry it helped create.
The global coral crisis may have already started
The world’s coral reefs may be in the middle of the widest global bleaching event ever recorded, the National Oceanic and Atmospheric Administration and international partners announced Monday. Extraordinarily high ocean temperatures are to blame.
Bleaching happens when corals become so stressed that they lose the symbiotic algae they need to survive, my colleague Catrin Einhorn explained. If the water surrounding them is too hot for too long, bleached corals die.
This is the fourth global bleaching event on record, but scientists expect it to affect more reefs than any other. They should know for sure within a week or two.
Coral reefs, as Catrin wrote, nurture an estimated one-quarter of ocean species at some point during their life cycles, supporting fish that provide protein for millions of people and protecting coasts from storms.
Some scientists are trying “assisted evolution” to give vulnerable wildlife such as coral reefs a chance, my colleague Emily Anthes wrote. In 2015, for instance, scientists created more heat-resistant coral by crossbreeding colonies from different latitudes.
Many conservation groups fear that the interventions are just a distraction to the broader solutions needed to avert the extinction crisis, especially curbing climate change.
— Manuela Andreoni
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