Tesla To Slash Workforce In Effort To Bring Cheapest Model 3 To Market

AWD Tesla Model 3 being built in a tent

JAN 18 2019 BY STEVEN LOVEDAY 189

Musk hints at possible profit in Q4.

There has been much talk about whether Tesla was able to make a profit in Q4. In addition, with overseas Model 3 sales moving forward and the cheapest (base $35,000) Model 3 looming, adjustments are coming. This isn’t unexpected, however, we didn’t think that the automaker would be cutting full-time employees to make ends meet. Tesla CEO Elon Musk sent a message to all employees today. It stated:

 … we unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months.

Musk says that while Tesla was able to generate a GAAP profit in Q4 2018, based on “preliminary, unaudited results,” it’s not as high as that of 2018 Q3. We already know that all automakers are facing what may be a very tough year ahead. General Motors already implemented some necessary steps in November to assure that 2019 may move forward successfully. Additionally, Ford has announced that it’s uncertain just how 2019 will play out.

We’ve included Musk’s letter to employees in its entirety below:

Company Update

This morning, the following email was sent to all Tesla employees:

As we all experienced first-hand, last year was the most challenging in Tesla’s history. However, thanks to your efforts, 2018 was also the most successful year in Tesla’s history: we delivered almost as many cars as we did in all of 2017 in the last quarter alone and nearly as many cars last year as we did in all the prior years of Tesla’s existence combined! Model 3 also became the best-selling premium vehicle of 2018 in the US. This is truly remarkable and something that few thought possible just a short time ago.

Looking ahead at our mission of accelerating the advent of sustainable transport and energy, which is important for all life on Earth, we face an extremely difficult challenge: making our cars, batteries and solar products cost-competitive with fossil fuels. While we have made great progress, our products are still too expensive for most people. Tesla has only been producing cars for about a decade and we’re up against massive, entrenched competitors. The net effect is that Tesla must work much harder than other manufacturers to survive while building affordable, sustainable products.

In Q3 last year, we were able to make a 4% profit. While small by most standards, I would still consider this our first meaningful profit in the 15 years since we created Tesla. However, that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.

However, starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower priced variants of Model 3. Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.

Sorry for all these numbers, but I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult. This is not new for us – we have always faced significant challenges – but it is the reality we face. There are many companies that can offer a better work-life balance, because they are larger and more mature or in industries that are not so voraciously competitive. Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause.

As a result of the above, we unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn’t any other way.

To those departing, thank you for everything you have done to advance our mission. I am deeply grateful for your contributions to Tesla. We would not be where we are today without you.

For those remaining, although there are many challenges ahead, I believe we have the most exciting product roadmap of any consumer product company in the world. Full self-driving, Model Y, Semi, Truck and Roadster on the vehicle side and Powerwall/pack and Solar Roof on the energy side are only the start.

I am honored to work alongside you.

Thanks for everything,
Elon

Source: Tesla

Categories: Tesla

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189 Comments on "Tesla To Slash Workforce In Effort To Bring Cheapest Model 3 To Market"

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A nothing burger, Elon is great and cool, along with his products. He will just roll his debt over, maybe at a slightly higher rate. Rate are historically low. Go tesla!

Sarcasm?

Oh, and remember work harder AND smarter!

I suspect this is also increased automation. He had to hire way more warm bodies than he originally anticipated. I suspect he will still hire plenty though, the Shanghai Gigafactory will require more people, and I think he said they grew 30% last year, so cutting 7% is still a lot of growth over the year. With a lot of those being contractors they were probably only around for a short time anyway.

Yes, when you hire quickly, you get a few duds that you can only determine after a period of time. Fire them early before they become bad apples and contaminate other that will need to work diligently.

Uh, I think a better explanation is poor forecasting of their labor needs, i.e., poor management. Musk may be a visionary, but he should really allow someone with some business sense to either run the company or be involved in high-level business decisions.

Perfect is the enemy of good. What company in the world grows a new product line by 10x to billions in revenue and gets everything 100% perfectly optimized all within one year?

Yes, it’s a sign Tesla is here to stay.

Another Euro point of view

Yes but Tesla could have shifted par of those “warm bodies” busy with production to service centers & stores. That’s what growth is all about right ?

I’m sure if there’s job openings they can apply.

Yes, if they grew 30% last year and cut 7% of their force, that is a growth of roughly 21%. They are still growing (although I suspect it won’t be much this year, rather next time a new car releases).

Workers who are just “warm bodies” will not help speed up service either. I worked with such people doing computer installs, somehow that never called back the following as either installer or trained a computer repair tech. The company I worked for only called back the people they saw as “real workers”.

Shifting under-performing workers to another job sometimes does result in an improvement in that worker’s productivity. Other times it just underscores that the company should have fired the worker ASAP.

There is a lot of competition for jobs at Tesla; it’s seen as a highly desirable employer. With all that competition among people applying for jobs, there doesn’t seem to be much upside for Tesla to retrain under-performing workers for a different job.

it’s about growth in revenue, production, deliveries, market impact, and customer satisfaction. Your blanket statement expects all their gardening to grow too.

The inevitable transition to becoming a Chinese company

That’s what I’m thinking too: Tesla has on multiple occasions touted how they are reducing labour hours needed — it follows that they’d end up with some surplus workforce…

Also, some pointed out that with part of deliveries shifting overseas, there is probably a temporary over-capacity in the domestic delivery network — at least until domestic demand goes up again when cheaper variants become available, or other demand levers are pulled.

“touted how they are reducing labour hours needed”

1. The touts are cherry picked numbers. They never give full metrics.

2. They reduced labor hour per car but they increased production, so total labor hours did not really decline

The last big layoff did not include production workers. They didn’t say that this time, so it may include some. But there really aren’t that many people on the assembly line, and there’s no evidence of increased automation. If anything, they’ve been going the other way. I suspect they included a few union agitators and other malingerers from the factory, but this layoff was again focused on SCTY.

“Do more with less”

They’re still exporting higher end 3s globally this quarter…However this is a positive sign, before the $35k Tesla is available, they should first remove the bundled PUP and allow leasing of the higher end 3 models…

Re: Leasing – I feel that’s old car company mentality. With the reduced wear and tear, people are probably expecting to keep their electrics longer. Plus, Tesla doesn’t seem so interested in the back end stuff a typical car dealership does; I don’t think they want to deal with all the inventory that comes along with leasing.

I disagree entirely. Electric cars and particularly battery longevity are concerns among the general public and with a new, unproven technology- at least in their eyes- I think leasing would be very popular. Combine that with the fact that electric cars tend to be more expensive like-for-like if it comes even more appealing as people often lease cars they couldn’t afford to buy. The final reason I think leasing is attractive is because electric cars will improve much more quickly then ICEV’s so it’s more of an early adopter thing. With all the investment going on in the field I have to imagine that someone who can afford a $70,000 car today will be offered a much-improved version 5 years from now for the same money.

See John Oliver on use car sales and leaseing. It’s a Gold Mine

Plus I really don’t think Tesla minds the inventory that will come along with leasing, they will take the cars back, refurbish and sell as CPO. I think Tesla stands to make decent money of those CPO sales as well.

Tesla didn’t offer leases during the first few years of Model S production, but eventually did start offering them.

I imagine we’ll see the same pattern with the Model 3. After the pent-up initial demand is mostly satisfied, we’ll probably see Tesla start offering leases for the Model 3. It’s a demand lever that Tesla will eventually pull, but no need to do so at present, with overseas deliveries just starting and so many new orders for the highest trim levels of the Model 3.

Correct but they were a newer company then who had never leased to anyone…They now paved the road for the S and X and Musk said they’d be a “leasing model” for the semi which isn’t even out yet…IMO, they should have considered leasing the performance only versions at the same time they offered the mid range…

IEV had an article that 80% of all EV buyers lease…Most buying Teslas, especially the higher MSRPs ones, are often fairly wealthy and do not plan to drive them into the ground…

Lease payments would be less because the depreciation of the BEV would be less (resale value is higher) at lease term’s end. Yet another way BEV’s advantages helps the end user.

They can’t remove the bundled PUP, it generates a big chunk of their margin.

Tesla will make the PUP (Premium Upgrade Package) optional when it can afford to do so… and not until.

From their lowest MSRP offering, the MR, it’s now $1000 when launched but they also removed the referral incentive(s)…

They might not be able to drop the bundled PUP all at once, but they can however offer a PUP1 and PUP2 package. Just like BMW and Audi and most every other company build different packages.

After the growth jump with all hands on deck now the time of a calming down has come. But there are two ways to calm down: everybody can work less or work as hard as before with fewer people. The last choice, however hard, is best since you get the same work done but you grow margin on the cheaper models. So to me, thinking about Tesla’s goal, this seems positive.

So is this through automation or whips and chains?

That is good news that Tesla is in process of making the necessary additional organizational adjustments to follow through with Tesla’s plan to bring to market a base priced Model 3.

Also great news that Tesla anticipates a GAP Q4/18 profit.

It’s inspiring to see a public company roll up its sleeve and lean-in hard to get something important done; advancement to sustainable energy security.

Nice to see Tesla follow GM’s lead. Better to make adjustments when you are still making profits than wait too long beating a dead non profitable horse.

@Bunny said: “…Better to make adjustments when you are still making profits than wait too long beating a dead non profitable horse.”
—————-

Tesla has continually made adjustments which is a good thing.

@Bunny- Have you yet gotten chance to test ride the Tesla Semi?

“Also great news that Tesla anticipates a GAAP Q4/18 profit.”

Tesla is probably also anticipating a GAAP Q1/19 loss, hence the need to slash the workforce by 7% to remain profitable. Tesla did the same thing in 2018, slashing its workforce by 10% to show a GAAP profit for Q3/18 & Q4/18. The lower headcount had a big negative impact on the responsiveness of customer service, and Tesla had to resort to using no-cost, volunteer labor (Tesla owners) to help staff its showrooms and delivery centers in Q4/18.

Well we need a carbon tax its supported by all that believe in Climate Change. It’s also supported even by some unlikely companies, ExxonMobil, Shell and BP. Former Federal Reserve Chairmen Greenspan and Volcker also recommend a carbon tax.
It’s Trump that doesn’t believe in science and his GOP Congressman are scared to death of him and enable him and party over country and the planet.

Not so much belief as understanding, or trust in those who do understand. High school physics and chemistry shows that when two gaseous elements form an asymmetric compound aka H20, CO2, CH4, and are exposed to infrared radiation, they trap heat. Simple lab experiment. You simply need to know the ppm parts per million to analyze or measure the amount of heat that is trapped which a $100 off the shelf gauge will measure. This one variable does not explain all the complexities of global warming, but with 50 measurable tons of CO2 per year dumped into the atmosphere, it’s a pretty big variable. Of course, the pulmonologist and cardiologist have been telling us for years that many asthma and cancers can be traced to the particulate matter that enters our bloodstream through the breathing of burnt fossil fuels so there is that too.

Yes, since water is the most efficacious greenhouse gas, (around 94%), we better start draining the Atlantic and Pacific Oceans since we want things to get colder even faster than they are going to be. Those pesky Oceans aren’t cooperating anyway, – they don’t follow BIG EXPERT SETTLED SCIENCE, since they exchange around 50x the amount of CO2 every year anyway compared to man-made sources.

Water is in a cycle. It evaporates into the air then it falls out as precipitation. Evaporation and precipitation are in a balanced natural cycle. There is no net change in greenhouse impact.

CO2 from fossil fuels are not being returned to underground in a balanced natural cycle. Stored CO2 is being released and this CO2 is NOT falling out as precipitation. It is accumulating in the atmosphere. There is no natural cycle for returning CO2 back underground at the same rate as humans have been releasing it by burning it. This is causing a net change in greenhouse impact.

It is like having a tub that is 94% full, and then turning on the faucet and having it overflow. And then claim that turning on the faucet didn’t cause it to overflow because the tub was 94% full and had been 94% full for centuries.

Sadly, you will never understand this critical difference, because you willfully don’t want to understand. I can’t wait for yet another one of your thought-free responses.

Oh man, you better go back to being resident expert on the National Electrical Code.

You see, this is why I call you the SuperDope. You don’t understand that the oceans also adsorb or release Carbon Dioxide.

Anyone who have ever drank a glass of Soda Pop understands at a minimum, the ‘release’ part.

So as they expand and sell more cats then ever and plan on releasing the $35k Model 3 they’ll need less workers?

Another Euro point of view

Yes and do not ask silly questions please 🙂

They are selling cats now? That’s adorable! 😛

To answer your question: increasing production efficiency comes down in large part to reducing labour hours needed — so yes, they need less workers as the process improves; and it’s in fact a requirement for reaching the promised price point.

Don’t you follow Elon on Twitter? Tesla started selling cats around the same time SpaceX started selling flamethrowers.

https://gregstevens.com/wp-content/uploads/2015/06/elon-musk-will-control-the-entire-world-by-2050.jpg

Or maybe Tesla is gradually increasing productivity by streamlining assembly and/or by introducing automation in parts of the assembly line where they failed to do so previously.

I tried to get Jonathan to give you a job at Tesla since you enthusiastically at one time expressed keen interest.

Tesla is still hiring. They are also firing people or processes that are inefficient. We went through this last May. They let go thousands of people, hired thousands of people, tripled production, made a profit. That said, Musk is firing a lot of people and doing a lot of restructuring this month. I hope he isn’t agitated about something.

“Tesla is still hiring. They are also firing people or processes that are inefficient.” Imagine now if Tesla was Unionized they couldn’t make any of these necessary adjustments. The Union would run the company into the ground.

Well to be honest, I wouldn’t ever work for Tesla because they seem to have little or no regard for workers as human beings and their corporate culture needs some serious work. I think there should be a little bit of a balance sometimes and that balance will either come from empowering workers collectively with unions or empowering individuals with legal protections. Whatever works.

Ok -errrrr, now what am I supposed to say – Oh yeah! “YOU TESLA SHORTER!!!!”, or was that Hater?

The Model Y will be out before a true $35k Model 3 gets delivered into customer hands.

@bro1999 said: “The Model Y will be out before a true $35k Model 3 gets delivered into customer hands.”
————-

Hopefully your prediction is correct… that would mean Model Y goes into production this year.

I Can Haz Tesla Cat!

Tesla has a high amount of labor per vehicle compared to other car manufacturers. Part of this was improper automation needing more labor. As they improve productivity further then yeas fewer workers hours per car. New factory in lower labor cost area (china) will allow for higher growth but higher employment but fewer labor dollars per car.

They’ll need less red paint since, at a $2500 option, the $35k model will be BLACK. The picture at the beginning is wrong.

Another Euro point of view

What a free fall this morning…and this despite markets being in the green overall, it might well be the mother of all bubble stocks after all.

Dream on you hater.
Tesla is a volatile stock and the whole market is volatile due to the idiot policies of the Dumpster President. Short term movements of its valuation are are commonplace.
Tesla’s market position as the #1 EV maker is sound.

I had started to worry. So many posts and no hate-Trump comment yet? Relief!

Well, if you leave your Idaho/Breitbart bubble you might find out the truth so you had better stay there especially when the Mueller report comes out and shows that your Fuhrer is a self-serving traitor to our country!!

Even extremely liberal liberals (that’s the term in vogue – so I’m using it even though I don’t literally believe it), like otherwise intelligent Webster Tarpley (he’s especially mad at Trump since Webster called his wife a ‘WHORE’, and Trump sued him and won!), are expecting Mueller to come out with something Damning. But, since there was not even the accusation of a crime initially, many of you guys are going to be very taken aback when it is a Nothing-Burger. Obviously (and it really is obvious), all the stuff that SHOULD have been investigated, as a for instance Uranium One’s 30% sale to the Russians couldn’t be investigated (we are told), since Mueller was too busy investigating Trump’s crime which they haven’t even said what Crime he committed and there shouldn’t have been an investigation in the first place if there was no proof of a crime.– Clintons don’t have any problem with the Russian’s purchase – which seemingly was fair and square on their end – the crime THERE is that the money didn’t go to anyone else but the Clinton Foundation, of which sucked in so many big-wigs that even Mueller is compromised on THAT one.

Good old Breitbart Bill and “what aboutism“!

hey Breitbart still hasn’t reported on the ‘whore’ story, but then I DON’T read him.

Here are the real facts on the much investigated Uranium One BS for radicalized right wingers like yourself and the others here to ignore along with all the other facts you choose to ignore to protect the “alternative facts” you so willingly regurgitate from right-wing propaganda.
https://en.m.wikipedia.org/wiki/Uranium_One_controversy

Hehehe one of the facts you chose to ignore was the ‘opinion’ that although there ‘may’ have been a crime involved, that it was (opinion again) ‘not worth prosecuting’.

Oh all the dim bulbs here – oh well, Rather like swatting annoying flies in the summertime. The KEY fact here, is, in the future, someone who matters may have a differing opinion.

Yes, I live in Idaho, but I don’t like either Hitler or Stalin to think for me. So I don’t read Breitbart or any other partisan publication either on the Right or the Left. See, on right wing forums I argue with right wingers but on sites like this I argue, naturally, with leftists because admittedly they are the majority here and the instigators.
Now, regarding TSLA dropping 13% today, NO, it is not due to volatility and certainly the ” Dumpster President” had nothing to do with it. If you bothered to read financial news today, you would know that ” News of layoffs and a likely smaller fourth-quarter profit stoked investor fears about growth and demand at Tesla Inc., bringing the company’s shares down 13% on Friday.” Also, “For most auto manufacturers, the cost-cutting would be received positively, but in Tesla’s case, investors start to second guess whether demand is the real issue”.
Of course, when someone’s mind is firmly made up, the facts don’t mean much.
On a positive note, as a TSLA investor I see this as a buying opportunity and long term profit because Tesla will succeed.

TSLA shares are still firmly in the middle of their 52 week highs and lows.

TSLA moved this far in a single day on this news ONLY because TSLA is a volatile stock in the first place. Electronic trading amplified the volatility.

The volatility continues in the after-hours trading where it is currently trading back up again.

It does this every week, what are you talking about? People will realize that reacting to the selling was a silly move as others buy up more stock.

That what I do, stock goes down, I buy up stock, stock goes up, I sell. I keep a float of 200 shares and my bank accounts still increasing slowly.

When TSLA dips down close to $300.oo a share, its time to back up the Semi, and start loading up a few more shares, and add them to your entrenched long position.

@Another Euro… said: “What a free fall this morning… [blah]… mother of all bubble stocks… [blah]…”
——————

My, oh, my, the sky is falling. I must run and tell the lion about it…

Right. Serial Tesla bashers like “Another Euro…” always, always want TSLA investors (real investors who actually buy TSLA stock, not fake TSLA short-sellers who just borrow stock) to panic and sell their stock at fire-sale prices.

And they’ll say literally anything in an attempt to make that happen, no matter how untrue or misleading it is.

What a waste of oxygen!

I hope it falls more so I can buy more stock.

Not surprised to learn this is where you are coming from…

These are the days trolls like yourself live for no doubt. It’s a sad life in which days like this are the highlights.

OMG, Another Euro Tesla Basher, are you still losing money by trying to short-sell TSLA?!?

I would have thought by now you’d have quit beating your head against that brick wall. Some people never learn!

Buy low, sell high. This is another opportunity.

Another Euro point of view

…or an opportunity to buy high & sell low.

I don’t think the time after a 9-10% drop is ever a good opportunity to short. You’re already late to the game and behind the news, so why would you be able to make money off a market you’re just bandwagoning?

Another Euro point of view

I was invested into stocks very shortly and unfortunately for me in the period 2007-2009, never before and never after. I am modestly invested in real estate and very happy about it (no more than 5% gain every year but steady and that’s really good enough for me). I am about the less greedy individual I know.

@Another Euro… said: “…I am about the less greedy individual I know.”
—————-

That is good provided greed is not confused with ambition.

Another Euro point of view

Pur si muove.

-13.5% now. Quite a fall for a generally green day. Imagine what it would have been on a bad day.

A buying opportunity. If you trade TSLA right you can make like a bandit. If you would rather invest, buy low and hold. You will be rewarded.

Seriously? Have you actually followed Tesla stock at all? It’s about as volatile as Dioxygen difluoride. The general trend is upward, but a 10% drop on news that is neutral or even arguably good is nothing new. It will pick back up again soon enough. And it will plummet back down again at some point, and then back up again…

There’s some hope that it might start calming down later this year; after a few profitable quarters it should qualify for entry to the S&P 500; that will bring in a lot more stable long-term stock owners which should dampen down the volatility.

But for now, Tesla stock is what it is. If you’re not prepared for wild swings in price, don’t get involved.

The most essential contractors and temps …. i.e. those fluent in Mandarin. When in doubt ship or job it out. China here they go!

After reducing labor time for producing Model 3 and axing the 75D S/X, definitely not surprised by this news, especially considering the silicon valley nature of Tesla. This also could save them around a quarter billion in unnecessary expenditure over a year or in the neighborhood of 50 million a quarter. Of course committing to being GAAP profitable moving forward and then executing on that, with things like reducing head-count, causes the market to panic and the stock to go down, even though that’s what people keep demanding of them. lol.

I think the panic comes mostly from realising that profit is not yet as robust as some might have hoped? I guess it might trigger serious doubts about future prospects among the more nervous of investors… (And/or renewed hope for failure among short sellers.)

The “panic” comes from the clear statement they will exhaust overseas pent-up demand for high-margin Model 3s by May. And they can’t yet hit the cost points needed to be viable making the lower cost versions for which demand is plentiful.

I previously said Europe and Asia would buy them 6-9 months to get costs down. I was too optimistic.

Another Euro point of view

I know this not science but, living, in Luxembourg, the country with the world’s highest per capita income, and yet I do not see that many EUR 57’000/USD 65’000 cars around when driving in town (price of a Model 3 here). Europeans are just not that much in expensive cars, we often have other values, other interests. Also, if you see Jose Pontes EV Sales blog statistics, it might have been anticipated that being over optimistic about Tesla Model 3 sales in both Europe and China was a dangerous bet. For example Swedish 2018 pluggin sales statistics: top of the list is VW Passat GTE (a practical station wagon) and Tesla S comes only 10th. To summarize I would say, for China, Model 3 has not enough whistle and bells & competition (Nio) is already strong there, for European market, not enough practicality (sedan) & still too expensive + generally (for both markets) we really did not get enough coolaid.

If you want to toss Kool-Aid ( proper spelling based on cheap, sugary drink product sold in America ) aside, just drive the car. Folks like yourself who read a lot of information, then bloviate all over the net just need to freakin’ – drive – the – car. Everything you say is speculation. Brand fanboys and nationalistic types just love doing this. Armchair experts? I own an AWD Model 3 and it is so revolutionary, you will sound like those in Europe who believed Nokia would dominate the cellphone market for decades to come. People are trading in Prius and Volvo, BMW 3 Series and Carollas for Model 3. How do I know? I read also. The car is cutting a new niche for itself in the marketplace. So if you know about cars, force yourself to be objective and just drive one. Leave your predisposed biases at home. Apple introduced the smartphone to the world and it totally disrupted the industry. Do yourself good and you’ll understand consumer buying patterns better. You are comparing what you know with something you don’t know. The Tesla 3 is just that much different. Just that disruptive. Just like smartphones, consumers will… Read more »
Another Euro point of view

True I never drove a Tesla, but also I have only once driven a Porsche, and strictly by accident. I have no inclination for above EUR 35k cars except second hand. Would I be given the opportunity to drive one I would accept if litteraly next door and if I had nothing more interesting to do. Then I would look if convenient to transport building materials and boat gear.

You’d never drive a Tesla, yet you camp out at forums regarding Teslas, and talk about why the Tesla product sucks. That makes a lot of sense.

I test drove a Model S last spring and a Model 3 in late summer. I really liked the Model 3. It’s too expensive to sell in the volumes Tesla needs, though. They have to reduce their costs.

Thank you Captain Obvious.

Of course they have to reduce their costs. That’s how moving from low volume to high volume production works for every single durable good ever sold by every manufacturing industry ever in the history of capitalism.

Ever since Tesla released their “Secret Plan” a decade ago, Tesla has been talking about this exact issue of reducing their costs over time as they continue to ramp up higher and higher volume cars. This is the entire point of the Gigafactory and Model’s 3 and Y.

“The “panic” comes from the clear statement they will exhaust overseas pent-up demand for high-margin Model 3s by May. And they can’t yet hit the cost points needed to be viable making the lower cost versions for which demand is plentiful.

I previously said Europe and Asia would buy them 6-9 months to get costs down. I was too optimistic.”

Not sure panic is the right term. The question becomes whether they believe their response is adequate? Have to assume they initially believe it will be or else we’d already see more levers being pulled.

I don’t think anyone could have reasonably expected that pent-up overseas demand for the most expensive variants would have lasted for more than a quarter. (Which would mean up to about 40,000 in Europe, plus some yet unknown number in China.) Panicking on learning that just means being bad at maths.

Panic? What panic?

There may be some panic among long-term TSLA short-sellers, as more and more of those in their diminishing ranks face the reality that any realistic hope on their part for Tesla’s collapse has faded away…

Another Euro point of view

No panic but landing back on earth to a normal valuation, you wrote yourself a few times that Tesla was overvalued. What you see here is Elon acting like a normal car manufacturer’s CEO stating that this is a cut throat business with a bloody fight for pushing costs down. That means the typical car manufacturing low margins thus car manufacturing companies valuation. All that BS about Amazon type of valuation which will go up in smoke as this simply is a very capital intensive low margin business.
And no, Tesla will not sell full self driving cars neither in 2019 nor in 2020.
What amazes me is that Elon himself is passing the message to his followers but still he is not being listened to. It’s like when he stopped the referral program because it costs to much. He said it, the C word, costs !

None of the Wall Street analysts factor in self driving in their Tesla price targets at all. These are entirely based on future growth prospects.

I wouldn’t say they he is “hinting” at a profit: he is stating it pretty much explicitly. (Barring something unexpected cropping up while further refining the numbers…)

Also, was there really much talk about Q4 being profitable? I think there was a very broad consensus that it would be in the black — the question only being whether it would surpass Q3, or drop below.

(After some initial denial over the Q3 numbers, even many of the biggest bears had to admit Q4 would likely be positive too, and shifted their focus to Q1 instead…)

I thought Q4 would be more profitable, but Q1 would take a hit and not be (as he only stated the Q3 and Q4 would be cashflow positive). I think we will still see that, and maybe they did something in Q4 to hurt profits to make Q1 look better, who knows. They have Full Self Driving, Roadster 2, Semi, Model Y parts design and orders, Shanghai Gigafactory and other fun stuff to eat up money throughout 2019.

I do expect that Tesla will be spending more in most or all quarters this year on those projects you mention than they did in Q3 last year. I suspect there was some suspension of spending on those projects during Q3, as part of the strong effort to show a profit that quarter.

However, Elon has said the Shanghai Gigafactory will be funded with Chinese investments, and I hope that is fully true… not just partially.

Yes, the Shanghai Gigafactory will be funded by Chinese investments, thus no need to issue more stocks to raise money for it. But they still have to account for the costs.

You remember they had a $300 (approx) million debt due in Q4. They have a bigger one in Q2 unless stock price is @$360.

Q1, not Q2.

Don’t forget that in Q3/18 Tesla sold all of its CARB credits to Toyota (for the second year in a row) for a boost in Q3 revenue. Q4/18 will not have this boost in revenue.

What makes you think they sold *all* of their credits? I don’t remember any information suggesting that…

(Also, that was “only” $50 million of the >$300 million profit…)

Q1 has to absorb the one-time costs of priming the overseas sales pipeline.

We’ve known this was coming since Q2 2018 when Tesla announced their plans for overseas sales starting in early 2019. So yes, Q1 should take a hit, on top of the normal seasonality of EV sales that we see every year in Tesla sales (and all other EV car maker’s Q1 sales).

I think that only affects cash flow though, not profitability?…

More importantly though, contrary to what bears are suggesting, I don’t think the impact will actually be that critical. As usual, Tesla is building the cars for overseas markets at the beginning of the quarter, so they can be delivered before the end. While this tightens the cash position around the middle of the quarter, the balance for the full quarter shouldn’t really be affected that much.

Also notice how some shorters have moved the goal posts again. First it was a profitable quarter, then two profitable quarters in a row, not I am seeing post where they are demanding Tesla must have four profitable quarters in a row or it is a failure!

At this rate Tesla will become the biggest electric car company and the shorters will still claim it will fail next year.

They are hurdles, not goal posts. Tesla is in a very long hurdle race. If they wipe out on any single hurdle they lose the race. Bears sometimes list many of the hurdles Tesla must clear to be worth $60 billion, but it’s true they usually focus on the hurdle immediately ahead until Tesla clears it.

I think Wall Street’s tendency, since the “greed is good” movement of the 1980s, has been to focus on short-term gains at the expense of long-term financial soundness. This has had an extremely negative effect on the financial health of far too many American businesses. Thank goodness Tesla eschews such short-term thinking!

“This is — maximum of investing should not be focused on short-term things. You should be focused on long-term things. We have no interest in satisfying the desires of day traders, like we couldn’t care less. Please sell our stock and don’t buy it.” — Elon Musk, 2 May 2018, responding to a time-wasting investor question during a conference call

https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-tax-subsidies-for-ceo-pay/
Greedy CEO’s are definitely a problem. CEO’s are compensated far beyond there worth and the tax code was changed years ago that allowed companies to deduct the compensation a CEO receives which resulted in the astronomical pay the CEO’s receive. I don’t mind if a CEO that starts a company makes money because of his ability and investment. However Home Depot fire there CEO Nardelli years ago and he received 200 million to leave. He may not have been a good CEO but the lawyer he hired to negotiate his contract was a genius.

Yeah, the crazy high tax rates we had in the 50’s and 60’s were never intended to drive large returns to the treasury, they were intended to encourage companies and the wealthy to invest their money back into their businesses (both employee benefits and capital expenditures) rather than cashing out.

No one wanted to send 60-70% of the top rates back to the government, so the plowed the money back into productive activities.

We need a tax structure that encourages more of the money supply to be utilized a higher velocity. The higher up the food chain the money supply goes the slower it’s velocity.

” so the plowed the money back into productive activities.”

They mostly plowed money into uneconomic tax shelters.

Absent special tax breaks, investing in production does not reduce your taxable profit enough to matter.

Not at all. In fact, there were only a tiny fraction of the current tax shelters available to companies in the 1950’s and 60’s.

By dollar, the largest “tax shelter” available to corporations in the 1950’s and 60’s was putting money into building new factories and buying new equipment, followed by putting money into employee pensions and health insurance. All of which are very well proven ways to INCREASE a nation’s GDP.

Hardly “uneconomic”.

Sure. It doesn’t matter what Tesla does; the short-selling FÜDsters will find some way to spin it to make it look bad, even if they have to make a swift U-turn and make an argument precisely the opposite of what they made the day before, or an hour before.

Tesla showing a strong profit in Q3 2018 has decimated (at least!) the ranks of the short-sellers, but sadly a few of the die-hard FÜDsters are still around. 🙁

My assessment of the more rational industry analysts is that they expected Tesla to show some profit in Q4, but a smaller profit than the larger than expected profit Tesla showed in Q3. Or maybe that’s just me projecting my own assessment thru observational bias.

Anyway, that’s what I expected and still expect.

Yes, that’s what analyst “consensus” was saying for months now.

So apparently few people remember that this exact thing happened already in 2018. They slashed I think it was 10% that time. And of course everyone freaked out. The next thing that happened was that their model 3 production rate started to rocket and they made their breakthrough profit a quarter later. The workforce grew back again, and is currently quite a bit higher than it was when the previous cuts were made. Look, I get it. Nobody wants to see job losses. It hurts and for those affected it is personal. It’s not great. But the wider picture of Tesla’s health should not be greatly changed by this announcement because they will likely start hiring again almost immediately. This is a case of cutting where necessary to allow room for growth elsewhere. There are other parts of the letter should honestly be more interesting for an outsider than the job cuts. There are some hints at timeframes for expansion of the Model 3 line. First it confirms that the mid-range should be hitting Europe and China around May, and second that Standard range is still a target, and that the continued US tax credit reduction is a driving force… Read more »

“mid-range cars will have brought the ASP down”

Only by about 1500 (3000 less for ~50% of the cars). There was also a direct reduction in COGS since it has fewer batteries. So the overall gross margin hit should have been less than $1000, or 2%. High production rate and continued efficiency improvement should have more than offset that. The wild card is option take rate, especially EAP which is $5000 of pure margin.

“they had a chunk of debt to pay down in Q4”

This has no effect on profit/loss.

“we expect all quarters going forward to be profitable, with the possible exception of Q1 2019”

They never said that. And to repeat myself, the $920 million of bonds due in March have zero effect on profit/loss. It does affect cash, of course, but this layoff will not save a meaningful amount of cash in the near term.

Re “They never said that” — Yes they did. I *distinctly* remember it being said on the earnings call. Let me look it up for you…

….

Okay, here it is: https://www.nasdaq.com/aspx/call-transcript.aspx?StoryId=4214138&Title=tesla-inc-tsla-ceo-elon-musk-on-q3-2018-results-earnings-call-transcript

[quote]
I think we can actually be positive cash flow and profitable for all quarters going forward, leaving aside quarters where we may need to do a significant repayment, for example in Q1 next year. But I think even in Q1, I think we can be approximately flat in cash flow by end of quarter.
[/quote]

And yes, I may be conflating cash flow with profit, but my point remains.

Precise speech is not Musk’s strong suit. The “leaving aside” caveat only applies to cash flow, not profits.

Since the bond repayment has no effect on profits, Musk’s new target of “a tiny profit” for Q1 “with great difficulty, effort and some luck” is a dramatic reversal from his prior guidance given less than 3 months ago.

My reply got sent to moderation for no apparent reason.

Ultra-short version – debt repayment does not affect profit/loss. And Tesla never said Q1 might be unprofitable until today.

All car sales are typically lower in the first quarter. Not much of a surprise.
Unlike the legacy companies Tesla matches production with sales. Not having a massive amount of cars sitting for 90 days or more waiting to be sold.

All car companies match production with sales. Large inventories give them a few weeks extra to see if the change in sales volume is permanent or just a temporary blip.

Tesla is entering huge new markets for the Model 3 in Q1. There is no reason for them to reduce production (unless demand has completely cratered, of course). They do have to reduce costs, though.

Correct, debt repayment affects cash flow and the balance sheet, not profit/loss on the income statement. On the balance sheet cash on the asset side and long-term debt on the liability side would be reduced by the same amount, if cash was used to repay the debt.

Good to see that someone is paying attention! 🙂

Another Euro point of view

Not so much, he apparently mixed up cash flow and Profit and loss. See my comment & DDW above. I am quite sure he realized it himself by now.

Another Euro point of view

“we expect all quarters going forward to be profitable, with the possible exception of Q1 2019”

You got it wrong in your earnings call transcription. Most likely you mixed up profit & loss and cash flow. As DDW wrote here ,repaying debt has no effect on profit and loss.

“It’s well-known and widely discussed, so shouldn’t be a surprise.” Exactly. There was a smaller debt in Q4 that had to be paid which affected those numbers. On a bright note, if you look at the Bloomberg tracker, you will see the outline of last week’s production was 6,000+. Since they only post the trend line now, it still reads 4,500 so the next few weeks will tell if the three new battery cells are functioning. Expect to see a lot of high-end Model 3s hitting the streets of Europe and Asia in the weeks and months to come.

So what happened to that earlier workforce reduction back in June if the workforce grew by 30% last year? Does Tesla actually execute on these announcements or is it just an investor confidence booster in time of bad news (like low profits last quarter and this quarter). Because reduction of workforce ánd increase production, that seems like a tall order. Unless Tesla is consolidating Model 3 production around that 5K/week mark it seems to have been stuck at for the past few months? Of course that would not be consistent with the need for additional economies of scale that’s suggested in the employee letter. Puzzling…

Not really puzzling at all. They have been working on line automation the whole time. They need both greater production and lower labor costs to make their numbers work. They foolishly tried to implement too much automation all at once to begin production. To address the bottlenecks where the automation initially failed they had to scale up labor. Now they are going back and addressing those automation steps that had to be sidelined.

Elektrec calls it ” natural progression as the Federal Tax program is reduced. Demand likely fell off quite a bit in the US meaning few people needed in sales and delivery centers and on the lines until demand is again spiked by a lower-priced Model 3″.

Guess that makes sense, except for fewer people needed on the (presumably production-)lines as Tesla should be able to ship whatever excess capacity the post incentive price increase caused overseas.

Someone else who has been paying attention! Thanks, Stan1.

30% may be “rounded up”. If they really ended 2018 at 49k employees they’re insane. That said, the earlier 9% layoff was mostly SCTY. A good chunk of this one probably is, too. They still need to hire a lot of people overseas for the Model 3 ramp so they must cut wherever possible in the US.

Well, the employee letter quiet emphatically mentions the need to reduce Model 3 production costs so it can make lower priced models profitably so it does look like the cost cut should be centered around the automotive rather than the energy business.

They need to cut Model 3 costs on a per car basis while still growing volume. Total Model 3 costs will increase, and increase significantly.

Energy, on the other hand, is a money loser. Business 101 says you cut your losers so you can focus on your winners. When they bailed SCTY out I said they should cut it 80-90% within the first year. They’ve cut much less, and much more slowly.

That may have been what you said but it’s not what Tesla says is happening right now. From what I hear the energy business is actually booming.

Is the tariff still 40% on Tesla going to China.
The way Trump negotiates is ridiculous he isn’t someone that can be trusted. If he had worked with the EU, TPP and WTO he would have had leverage. Instead he alienates our allies talks about leaving NATO, rips up agreement with Iran, tells Saudi’s to pump more oil. Than he gives Iran relief from oil sales in order to drive gasoline prices down prior to the 2018 election. Day 28 shutdown over a wall that border agents say isn’t needed. That what they need is the equipment for scanning vehicles at border crossings where 90% of illegal aliens and drugs come through. Border agents also want more judges so illegal aliens can be processed and turned back rather than release them in the US

China suspended the 25% penalty tariff for cars coming from the US for 90 days. As things stand today, the Q1 tariff is 15%.

Really I heard that after the meeting with Trump and Xi but I don’t remember that ever being confirmed.
Trump said it never heard anything from China.

Thanks I can’t believe I didn’t see this article or at least remember it. Certainly hope Tesla delivers as many as possible to China before the 90 day ends.

I think they plan to. They originally said Europe deliveries in Q1 and China maybe at the end of Q1 but probably Q2. They changed that to Europe and China both in February.

Yeah I guess I’m still surprised when they were shipping thousands of cars from a port in SF that it wasn’t going to China.

You have to book those ships in advance. We’ll probably hear of a ship to China before too long.

I thought this was an EV site?

Sorry, “progressives” can’t help themselves

So, reading between the lines, seems they want to get the base model $36k version out by July. Add some Tesla/Elon time and looking at end of 2019. July might see SR Battery + PUP.

They wanted to sell $35k version in November 2017. Even said they would on their web site until October.

It doesn’t matter what they want to do unless they can actually do it. Right now, they can’t.

Well, getting the SR version into production by July (or even May-June) seems quite plausible, based on Elon’s recent statements. But I don’t hold out much hope for that being the $35k version. I expect to see the SR version but still with the $5k Premium Upgrade Package (PUP) for at least a few more months, if not into 2020.

But Tesla has pleasantly surprised me more than once, so who knows? 🙂

Yes, SR+PUP by July. They’ll hold off on base 35k version as long as they can.

He could just break out Adaptive Cruise from AutoPilot and make it a $1000.00 option. That way they at least get some money from those of us that are too cheap to spend $5000.00 on AutoPilot.

Strawfire

A Tesla sales guy told me last summer EAP take rate was 90% while FSD was single digits. I doubt EAP was actually that high, but it’s a very popular option. A $1000 version would probably cost them more in lost EAP upgrades than it would gain them in new revenue.

That is exactly the amount I am prepared to pay for Adaptive Cruise. Not more. Wishful thinking?

Shall we do a poll and post results on Musk’s tweeter feed?

Drop AP price to $1500.

I agree. I had fun with the EAP free week, but not worth it to me for $5000. I wouldn’t pay more than $1000 for EAP.

Nothing is a surprise here. I was expecting Tesla to make a smaller Q4 2018 profit after making a maximum effort to produce a larger than expected profit in Q3 2018.

Tesla cut its workforce by 9% last year. I expect this to be an annual thing. And last year, the anti-Tesla “Wolf! Wolf! Wolf!” pack tried to make that out to be a sign Tesla is in trouble, exactly as they are trying today. This story gets pretty old after while.

But of course, actual facts don’t stop the professional anti-Tesla pravduh dispensers from yet again trying to paint Tesla’s recent corporate moves as a sign that Tesla is in financial trouble. Doesn’t really matter much what Tesla does; they’ll always try to make whatever it is out to be a bad thing. *Sigh*

See, for example, this latest collection of mendacity, misleading statements, and half-truths from the professional Tesla bashers at CNBC:

https://www.cnbc.com/2019/01/18/tesla-to-cut-its-workforce-by-around-7-percent.html

Another Euro point of view

What exactTesla bashing are you talking about in this video ? at first Phil Lebeau is almost strictly using Elon own words (the letter to employees he just released) , then that analyst they invited basically says he has no concerns about Tesla. Did you really listen to this video ? Maybe you posted the wrong link.

If Tesla can’t get Model 3 costs down they will very definitely be in financial trouble. They exhausted pent-up demand for $45k+ in the US and they are quickly exhausting it overseas.

“I expect this to be an annual thing”

So Elon lied seven months ago during the 9% layoff? He said in his e-mail:
“I also want to emphasize that we are making this hard decision now so that we never have to do this again.”

Deleted

It’s quite laughable how what as passes as a reporter over at CNBC misinterpreted Musk’s “tiny profit” warning for Q1 as pertaining to Q4 but otherwise I don’t see much wrong with the article.

Not sure the “panic”is about financial problems though as this isn’t really about financial problems, it seems to be more about demand. Clearly it’s no longer all hands on deck to meet demand but about cutting cost maybe just to keep things profitable while cheaper versions fill in the gap left by demand depletion for higher end versions. Makes me wonder how much scope there is for production expansion beyond the current 5K/week, though I suspect at some point at least China production will be extra.

These are still very good results, but maybe not the sort of results that warrant current market cap (though I’m definitely not an expert on that sort of things), hence maybe the “panic”.

Another Euro point of view

Agreed.

Pu-Pu said:
“Tesla cut its workforce by 9% last year. I expect this to be an annual thing. And last year, the anti-Tesla “Wolf! Wolf! Wolf!” pack tried to make that out to be a sign Tesla is in trouble, exactly as they are trying today. This story gets pretty old after while.”

Tesla was in trouble last year. Elon said Tesla was weeks away from bankruptcy. Tesla cut it’s workforce by 9% to reduce its costs and delay its approaching insolvency in hopes it could turn the tide with increased Model 3 production. This is well documented. Saying otherwise is revisionist history, if not an outright lie.

Some people complain about all the Tesla stories. Well, Tesla is the story, in fact they really are the only story, at this time that really matters in the ev world, so they get a lot of focus, and they are breaking new ground, going where no one has gone before.
It’s a huge disruption the likes of which has not been seen before, and probably never will be again, and Tesla is the spearhead and they are going to run into obstacles, make mistakes, and falter at times. But they are like a runner who has lapped the field and then begins to slow down slightly. They are still far ahead of the rest,

It’s not like they closed 5 plants, and ditched all their sedan lines, although they did drop the 75.

Tesla is the only EV story in the US. They are a minor player in China, where >50% of the world’s EVs are sold. Europe is a mixed bag.

Another Euro point of view

“Tesla is the story, in fact they really are the only story”

With all due respect this is a very US centric statement. For one, the Chinese with like 800k pluggins sold las year in China only would object to this.

I feel the biggest problem is the loss of the $7500 tax credit in the U.S. That makes Tesla’s cars $7500 more expensive than most of the competition. That combined with lower margin cars in 2019, is a recipe for hard times. I’m sure Tesla is looking at ways to reduce cost in the Model 3 as well as increase production efficiencies. Reading between the lines, it looks like the $35k version may be pushed out further into 2019.

But they did get 200,000 tries to get it right, maybe if they quit reinventing the wheel, and quit designing impractical designs, they would have been more competitive much earlier by years.

this is actually a pivotal moment for Tesla. the current models are all very cool, very nice cars, but also all over priced for what they are. So for a car company to make a profit on an overpriced car it’s not that hard, and Tesla has done that. Almost all current Tesla owners are EV enthusiast in one form or another. Once all of the enthusiast have an EV they like, the average car buyer is not going to pay a 15=20k plus price premium for electric. Also at the 35k price point Tesla is at a huge disadvantage without the 7500 tax credit, so the other manufacturers that are slow to adopt ev, will also have an advantage of cheaper battery prices from major suppliers. but also the full tax credit. I would propose a much fairer tax credit solution would be only for cars with a selling price below 40k and only a single total number of credits for all manufacturers, say 2 or 3 million credits. This would appropriately incentivize early adoption of manufacturers to gain knowledge of EV production efficiencies before the credits go way, but when they go away it does for everybody. The… Read more »
Another Euro point of view

“I would propose a much fairer tax credit solution would be only for cars with a selling price below 40k and only a single total number of credits for all manufacturers, say 2 or 3 million credits”

Indeed, why not. I could see the use of a tax credit with no price limit up to now to launch EVs which by definition had to be expensive because of battery cost but in now 2019 this argument is not so valid anymore and USD 40k seems a reasonable price point. Giving tax credits to expensive EVs gives a bad name to EVs among lower middle class people and thus becomes a political liability that is heavy to drag along for the EV car industry after a while. When the French were told to buy EVs and the price of gas abruptly increased on them by the end of 2018 they actually took to the street (les gillets jaunes/yellow jackets) and by now their press is becoming quite a bit anti EVs, the “cars for the rich”.

More carpet-bombing serial anti-Tesla Concern Trolling from a “Clean Diesel” driver I see.

Another Euro point of view

Then subtle & non repetitive critic was never really your thing.

yes a 7500 tax credit for someone buying a 100k dollar car seems ridiculous.

The huge and sustained success in the luxury car market indicates that Tesla’s cars aren’t overpriced within their market segment but that market segment being the luxury class means they aren’t affordable either and that includes Model 3 which even with the SR version available will very much remain a lower luxury class offering and not actually an affordable car. Which I think will limit the scope of demand, maybe around the current 5K/week but that still remains to be seen. But yes, it’s going to be challenging for Tesla to make the entry level vehicles profitable in a market that has the incentive system working against it while at the same time becoming more and more dependent on that version to sustain sales.

“we face an extremely difficult challenge: making our cars, batteries and solar products cost-competitive with fossil fuels. While we have made great progress, our products are still too expensive for most people.“

So despite what many Tesla fans (including myself on occasion), have said that Tesla vehicles are priced competitive to ICE, here we have Elon admitting that they are at a premium above ICE. Good to know he recognizes that and is making a commitment to reach a broader audience.

Another Euro point of view

Yes, liked the tone of it all. Elon becoming wiser by the day, maybe he got himself a nice girlfriend. Feeling the vibes of good influence ;-).

You calling Larry Ellison a girl? 🙂

yes encouraging to see they clearly understand the challenge, and recognize they are still too expensive.

I suspect the fanboys would have been all over this comment had it not come from Elon. I too am a tesla fanboy and a previous leaf owner, but I just cannot cost justify a luxury car purchase.

Is Model 3 production still operating three shifts? If not, is Tesla able to produce 5,000 Model 3s a week on just two shifts in 2019?

just now went to tesla site and built a model 3 and it said delivery in january. so not much backlog of orders now it seems.

Maybe they should not have lowered prices by $2,000 ?

No choice. Market determines the price.

Elon states “Looking ahead at our mission of accelerating the advent of sustainable transport and energy, which is important for all life on Earth, we face an extremely difficult challenge: making our cars, batteries and solar products cost-competitive with fossil fuels.” Unfortunately Tesla is following a path which is doomed to fail to achieve their mission while deliberately obstructing the only path which can achieve their mission. It is now impossible for private electric cars to reduce emissions by the amount required in the time frame required. The latest IPCC report says at least a halving of global emissions in about 10 years. The best we can hope for using private EVs is a 10% reduction. What can achieve the reductions necessary is electric passenger transport such as taxis and ride-sharing, particularly high occupancy services. Each vehicle used in such a service reduces emissions 20-50 times as much the same vehicle used privately. A year ago Tesla banned new vehicles used as taxis and ride-sharing from their Supercharger network. Tesla will not sell 120 kW Superchargers to 3rd parties. The best vehicle type to achieve the reductions are 12-24 seat minibuses. Tesla no longer mentions the minibus that they previously… Read more »

Sigh, this cabby is posting his frustration for Tesla limiting opportunists to exploit free Supercharging for commercial taxi services on every website….

Tesla’s ban has nothing to do with free Supercharging. Taxis are banned even when they want to pay for the service. It is painful to see such ignorant comments made. Do some research. Decide if you want to combat Climate Change.