Sluggish sales of electric cars, uncertain buyers – Tesla is reacting to the gloomy business development by cutting jobs. Is the crisis growing?
After the announcement of job cuts at Tesla, car expert Frank Schwope expects staff cuts at other car manufacturers as well. “Tesla is now also making job cuts that automotive suppliers decided on months ago. Other car manufacturers are likely to follow,” Schwope told the dpa. He also sees 2024 as a “slack” year for electromobility. Car expert Ferdinand Dudenhöffer said: “Tesla is sitting on factories that are not flexible and are too large. The growth model is now breaking down because the market is sinking.”
The US manufacturer Tesla wants to cut more than ten percent of its jobs worldwide in view of the slump in electric car sales. It is still unclear to what extent the announcement by company boss Elon Musk will affect the only European factory in Grünheide near Berlin. Among other things, Tesla is feeling the effects of the tough price war in the largest car market, China, and in the first quarter it delivered surprisingly fewer vehicles worldwide, almost 387,000 cars, than a year earlier. In Germany, the loss of purchase premiums for electric cars is having an impact on sales of battery-powered cars.
Schwope does not expect a crisis that will last for years
“For an American company, a job cut of 10 percent in times of crisis is nothing surprising; hire and fire happens much faster there,” said Schwope, referring to Tesla. The car expert is a lecturer in automotive economics at the Hanover University of Applied Sciences for Medium-Sized Businesses.
Schwope does not expect a long-lasting crisis for Tesla in Europe. “However, 2024 is likely to be a slump year for electromobility.” The expert estimated that the year 2025 should bring renewed growth for electromobility given the stricter emissions regulations that will then apply.
From his point of view, electric car manufacturers need planning security and no “hush and hot” in politics. “Abrupt changes to funding conditions are a catastrophe in this respect.” This would unsettle customers. However, bonuses for electric cars are not necessary for manufacturers at all, emphasized Schwope. Because car manufacturers have earned very well in recent years.
According to an analysis, the world’s largest car companies set records in terms of sales and profits last year. Tesla recorded the largest decline in 2023 in the average EBIT margin, which relates operating profit to sales.
Dudenhöffer also sees responsibility on the federal government
Car expert Dudenhöffer sees the reason for the slump in sales of electric cars in politics in Berlin and Brussels. “Politicians have destroyed utilization by questioning electromobility.” Dudenhöffer also referred to the abrupt end of funding from the environmental bonus for private individuals.
Tesla now has to see how it can make adjustments in the face of large excess capacities. “Personnel costs are the lesser evil,” said Dudenhöffer. Tesla needs a lot of money for the machines in its highly automated factories. The electric car manufacturer cannot “switch” between combustion cars and electric vehicles like other German manufacturers. Dudenhöffer expects that Tesla will not stick to its expansion plans in Grünheide. “Nothing will happen in the next five years.”
Source: Stern
