These are arguably not the best of times for Elon Musk. He is fighting for Twitter, and alas with his own employees.The embattled controversial CEO of Tesla, among others, has a big fight on his hand now as his most famous and profitable company, Tesla, is going through tough times.
Tesla’s sales from April through June fell to its lowest quarterly level, and it sold around 2,54,000 cars and SUVs from April through June, an 18% drop from the first three months of this year and also well below the pace in last year’s final quarter. This is being attributed to the ongoing problems with the supply chain and the temporary closure of the Shanghai plant.
Consequent to its poor performance, Tesla, which was the world’s top-seller of battery-powered vehicles, has lost the crown to the Warren Buffett-backed BYD. In the two quarters of this year put together, Tesla delivered 564,000 all-electric vehicles while BYD sold 641,000 electric vehicles in China. But it should be noted that some of BYD’s models are plug-in hybrids, and may not be exactly full electric cars. As per Chinese rules, they taken to be as 'zero emission' vehicles.
Tesla faces issues at office and factory
Tesla losing numbers due to Covid-19 rules and supply chain constraints is understandable. But it should be said, it is in the same period that BYD has managed to up the ante. But Tesla's problems are not confined to the China region alone. Its new factories in Texas and Berlin are losing billions of dollars, as they struggle to increase production because of a shortage of batteries and chips.
Germany's road traffic agency has said it was recalling Tesla models Y and 3 because of a fault in the automatic emergency call system that affects 59,000 vehicles globally. It is now being reported that Tesla will halt production for two weeks at its new factory in Germany from July 11 to address issues of longer manufacturing time, a lack of skilled workers, and quality assurance issues. The closure for two weeks is not related to the recall of Tesla vehicles by Germany’s automotive regulator.
Tesla has claimed that its volumes in 2022 would grow by more than 50% over the 936,000 sold last year. But with around 565,000 delivered vehicles to show for for its efforts, Tesla still has more than 800,000 to be delivered during the second half of the year. That looks a tall order now.
Aside from production constraints, Tesla is also facing quality issues. Tesla is under scrutiny, especially in the US, over complaints of cars made by the company suddenly braking at high speeds. On social media platforms and YouTube, there are many posts and videos alleging serious build quality issues in Tesla Model Y vehicle.
Meanwhile, at the office too, things were not any better for Tesla. Musk’s plan to get employees back in the office hit a speed bump as there weren’t enough desks and parking spots for returning workers.
Musk brazening it out
Asked about the various issues plaguing Tesla, Musk, in an interview was quoted as saying, getting the Berlin and Austin plants functional "are overwhelmingly our concerns. Everything else is a very small thing." But it did not seem convincing, and came across as typical Musk posturing.
Musk also has discussed making salaried workers return to offices and a possible 10% cut in Tesla’s work force due to a possible recession. Many feel that his bid for taking over Twitter has taken his focus from his main business. And it is now showing in the very many problems that it is facing simultaneously.
