Electric car maker’s restructuring continues amid EV market downturn

Elon Musk, the CEO of Tesla, has implemented a major shake-up by dismantling the division responsible for managing Tesla’s Supercharger business, dismissing two top executives, and laying off hundreds of employees as part of the company’s ongoing restructuring amidst a sharp decline in the electric vehicle (EV) market.

In an internal announcement on Monday, Musk revealed that Rebecca Tinucci, head of the superchargers group, and Daniel Ho, head of new products, along with their entire teams, would be departing from Tesla. The supercharger group, consisting of about 500 people, was disbanded. Additionally, the entire public policy unit, led by Rohan Patel until mid-April, will be dissolved.

While Tesla’s supercharger operations will continue, the restructuring raises questions about the future of the charging business, which was once a key advantage for Tesla over its competitors.

“Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction,” Musk wrote in the memo, emphasizing the necessity for stringent measures to ensure financial viability. He urged managers to review their teams and remove underperformers.

The decision to dismiss employees comes after Musk announced last month that Tesla would be reducing its workforce by “more than 10 per cent” to foster innovation and efficiency.

The urgency of the restructuring is underscored by Tesla’s recent financial performance, including nearly a 10 per cent decline in revenues in the first quarter of this year, marking its first year-on-year quarterly drop since 2020. The company’s share price has also seen a significant decline.

The unexpected layoffs have left employees surprised and uncertain about the future. Will Jameson, a former member of the supercharger team, expressed shock at the news, stating that Musk “has let our entire charging org go.”

The move to downsize the supercharger division comes at a time when Tesla has established itself as a leader in EV charging networks, with over 50,000 sites globally and 15,000 in North America. Tesla recently inked agreements with rivals like Ford, General Motors, and Rivian to utilize its NACS charging standard.

Despite the downsizing, Musk assured that Tesla would continue to expand its supercharger network at a slower pace and focus on enhancing existing locations for maximum efficiency and reliability.