With Elon Musk’s attention elsewhere, Tesla is stalling

Elon Musk's $A84 billion pay package has been approved by Tesla shareholders.

Elon Musk's $A84 billion pay package has been approved by Tesla shareholders. Photo: Getty/TND

Amid his war with the Australian government over what content can be shown on X, Elon Musk’s flagship business venture is seriously struggling in the face of competition, poor design and manufacturing, and his waning public image.

Tesla has cut prices globally, sacked thousands of workers and seen its profits crater, as its celebrity owner stoushes with the Australian government.

The car manufacturer’s profit fell 55 per cent compared to the first quarter of 2023, as sales fell by 8.5 per cent amid recalls of Cybertrucks and 14,000 staff being sacked.

Tesla’s chief financial officer Vaibhav Taneja said the “future is really bright”.

“We just have to get through this period and get there,” he said during the quarterly earnings call.

Musk continues to bet on the delivery of autonomous robo-taxis, after previously claiming that a million self-driving vehicles would be on the road by the middle of 2020.

“Going balls to the wall for autonomy is a blindingly obvious move,” Musk said on X.

“Everything else is like variations on a horse carriage.”

Tesla recall

Hopes of a cheaper vehicle failed to materialise during the release of Tesla’s quarterly earnings. Photo: AAP

The drop in sales was the first time the company has reported its year-on-year sales had dropped in four years, while its stock has fallen by more than 40 per cent since the start of the year.

Cybertruck debacle

Concerns about the delivery of a new vehicle aren’t unwarranted, following the continuing fallout from the botched delivery of the Cybertruck.

Almost universally mocked upon announcement, the Cybertruck has lived up to the grim hype after all 3878 vehicles that had been delivered were recalled because of a safety risk with the accelerator pedal.

“A trapped accelerator pedal can cause the vehicle to accelerate unintentionally, increasing the risk of a crash,” the US Department of Transportation said in its recall notice.

“Tesla service will replace or repair the accelerator pedal assembly, free of charge.”

Tesla Cybertruck

Every Tesla Cybertruck was recalled because of a fault involving its brake pedal. Photo: Getty

The Cybertruck has already been marred by Musk’s claims that it was bulletproof to 9mm, despite only being resistant to small-arms fire, and serious concerns about the safety of its design.

Staff sacked

Tesla announced plans to lay off more than 10 per cent of its global workforce to cut costs in preparation for the poor sales numbers, amounting to 14,000 people.

Musk told employees via email that the cuts were to “prepare the company for the next phase of growth,” the New York Times reported.

Amid the layoffs, Musk is pushing for a $US50 billion stock payday after it was previously rejected by a judge as “unfathomable”.

Before the vote in June, Tesla’s largest retail shareholder, Leo Koguan, has said he will vote against the package.

Although Tesla had a first-movers advantage against companies wedded to diesel and petrol cars, the company has lost about 14 per cent of its market share in the US since 2022, dropping from 65 to 51 per cent.

It still remains the world’s most valuable automotive company, despite Chinese electric vehicles and historic giants in the automotive field quickly catching up.

Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter.
Copyright © 2024 The New Daily.
All rights reserved.