While he is somewhat bogged down in his takeover of Twitter, which is not moving forward, Elon Musk faces another bigger problem: his Tesla business is doing badly, very badly. He spoke about it.
Elon Musk’s big plans for Tesla
3 weeks ago, we told you about this crazy project of Elon Musk: that of transforming the Supercharger stations for his Tesla cars into real entertainment centers. On the program, bars, restaurants, self-services or even drive-ins to wait while your electric car is recharging.
A first project of this type has been validated, and Tesla has just filed the building permit for a station in Santa Monica (near Hollywood).
But, the business is not doing well
However, the electric car company of which he has been CEO since October 2008 would not be well. Faced with its shareholders, Elon Musk recently admitted that the financial situation of the firm was on the brink. During a meeting with members of the Tesla Owners of Silicon Valley club, Musk said that “the past two years have been an absolute nightmare of supply chain disruptions“.
The company gained momentum in 2010 with its IPO, as well as in 2015 with the launch of its Model S, and its Model X. The model 3, marketed in July 2017 is another success for the firm . From July 2019 to June 2020, Tesla declares for the first time four profitable quarters in a row (it for example recorded 3.7 billion dollars in the fourth quarter of 2021), nothing seems to taint the expansion of the now open company on the world.
The causes ?
Nevertheless, a twisthe pandemic has actually significantly affected the production of Tesla models, while sales do not take off. All this while Tesla has invested heavily in recent years, for results at half mast. Thus, the CEO even announced that the company is currently losing billions of dollars. A climate so deleterious thatit does not rule out the possibility of imminent bankruptcy.
So how to go up the slope? According to Musk, it should decrease spendingin order to stabilize the situation: “Our main concern is how to make the factories work so we can pay people and not go bankrupt“. This reduction in expenditure will go through a halt in hiring, as well as a massive layoff several thousand employees in the coming months.
A critical economic situation which is not helped by the Chinese market, which was promising when it opened in 2019. China, for example, does not allow companies to repatriate dollars produced there outside the country.. Another problem, American cars are prohibited for two months in Beidaihe, popular seaside resort, from July 1, 2022. More generally, Tesla only inspires moderate confidence in the Chinese regime, because of the cameras scattered in the passenger compartments of cars.
Elon Musk must therefore find a stimulus solution to hope to develop his projects around his listed company.