In the still-developing electric vehicle (EV) industry, what happens to its leading company tends to affect every other manufacturer and supplier. That’s why some troubling news from the No. 1 EV maker almost immediately filtered down into the rest of the sector Monday, impacting the prices of fellow manufacturers and associated companies alike.
Up-and-coming Asian EV maker VinFast (NASDAQ: VFS), for example, saw its share price decelerate sharply by over 9% on the day. Next-generation EV battery developer QuantumScape (NYSE: QS) also took it on the chin, with its market value eroding by almost 7%. Its fellow power pack specialist, Freyr Battery (NYSE: FREY), managed to escape significant collateral damage, but its stock’s flat performance on the day wasn’t inspiring.
Large-scale layoffs coming
No prizes for guessing which major EV company was the bearer of the bad news. It was Tesla (NASDAQ: TSLA), of course.
On the basis of an internal company memo written by CEO Elon Musk, Business Insider reported that the EV giant is about to enact a large-scale set of layoffs. That report was widely disseminated in other media, and triggered a mild case of investor panic about the EV industry as a whole.
In the memo, Musk said that Tesla’s workforce is to be reduced by over 10%; he did not get more specific. He did say that the layoffs would affect the company’s workers throughout the world.
The high-profile CEO wrote that Tesla’s rapid growth had resulted in some duplication of job positions and roles, therefore, “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity.”
“There is nothing I hate more, but it must be done,” he continued. “This will enable us to be lean, innovative, and hungry for the next growth phase cycle.”
It what doesn’t seem to be a coincidence, on Monday long-serving Tesla senior vice president of powertrain and energy engineering Drew Baglino announced his resignation from the company on the Musk-owned X (formerly Twitter). Baglino is the…
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