When Musk thinks, Tesla lays off employees.

Even in the current market situation, we still cannot underestimate Tesla's position as the leading brand in the new energy vehicle industry.

It can be said that Tesla's every move directly affects the development of the entire automotive industry, and it is no exaggeration to call it a "barometer."

As the automotive industry reaches a turning point, Tesla was the first to feel the chill and announced that it would lay off more than 10% of its workforce globally.

According to reports, on April 15 local time, Tesla sent an email to all employees announcing the news.

As Elon Musk stated, "Tesla has grown rapidly worldwide, with multiple factories. However, this has led to overlapping roles and functions in certain areas. To reduce costs and improve productivity, the company conducted a thorough review of its organizational structure and made the difficult decision to reduce its global workforce by more than 10%."

According to documents previously submitted by Tesla to the U.S. Securities and Exchange Commission (SEC), as of December 31, 2023, Tesla had a total of 140,473 employees globally. This means the layoffs will affect more than 14,000 employees.

Although Tesla has conducted multiple rounds of layoffs since 2017, earlier layoffs seemed more like Musk "fixing the roof while the sun is shining."

This round of layoffs, however, shows that Tesla has already felt the chill of the new energy vehicle market.

Therefore, through these layoffs, what we need to see more clearly is Tesla's "loneliness at the top."

I

This was not without warning.

In the first quarter of this year, Tesla's sales saw a rare year-on-year and quarter-on-quarter decline. Data shows that Tesla delivered 386,800 vehicles globally in Q1, significantly lower than the 430,000 predicted by analysts, an 8.3% year-on-year drop and a 20.1% quarter-on-quarter decline.

For Tesla, which has always had strong sales, such a significant drop is undoubtedly unacceptable.

As a result, Tesla began a new round of layoffs to cut costs.

If we connect Tesla's layoffs with Apple's earlier decision to abandon its secret new energy vehicle project, we can see that Tesla's layoffs may not just be due to declining sales but also reflect the harsh reality that the new energy vehicle industry has entered a reshuffling phase.

Reports indicate that Apple abandoned its secret decade-long car project, and the related staff will be reassigned to the AI division.

It is reported that Apple invested tens of billions of dollars in its secret new energy vehicle project.

Apple's decision to abandon the project is akin to "cutting off the arm to save the body."

One major reason for Apple's drastic decision is that the new energy vehicle industry has entered a deep reshuffling phase.

Musk has previously expressed support for this.

With Apple abandoning its car project to focus on AI and Tesla announcing global layoffs of over 10%, we can clearly see the new trends emerging in the new energy vehicle sector.

Only by understanding the implications of these trends can we gain a relatively comprehensive and objective view of Tesla and the new energy vehicle industry's true state.

II

Tesla has always been the dominant player in the new energy vehicle sector. Even with so many competitors entering the market, its position has never been challenged.

This can be seen in Tesla's pricing advantage in the new energy vehicle market.

While most new energy vehicle players are lowering prices to boost sales, Tesla has been able to raise prices against the trend, which is direct proof of this phenomenon.

However, Tesla's influence in the new energy vehicle market has gradually declined as more players enter the field.

The recent layoffs and earlier sales declines clearly demonstrate this.

If we connect Tesla's situation with China's new energy vehicle market, this becomes even more apparent.

Earlier, China's new energy vehicle market had already begun a deep and comprehensive reshuffling.

Whether it's the collapse of Evergrande's car project, HiPhi's suspension, Li Auto's crisis, or the war of words between Xiaomi and IM Motors, we can see that the new energy vehicle sector has long passed its blue ocean phase and entered a true red ocean era.

In this era, fierce competition and battles for market share will become increasingly common.

For Tesla, although its dominance has remained unchallenged, as more players enter the new energy vehicle market, they will inevitably chip away at Tesla's "market share."

If Tesla wants to cut costs and better cope with market changes, it must abandon its previous expansion strategy and focus more on strategic contraction to find new growth opportunities.

These layoffs are a direct reflection of this shift.

In fact, in June 2022, Musk stated in an email to Tesla executives that due to his "super bad feeling" about the economy, the company needed to cut about 10% of its workforce. He also noted that rapid expansion had led to redundancy in some departments.

To summarize Musk's sentiment, it would be apt to say that "the new energy vehicle market has shifted from an era of growth to an era of competition for existing market share."

For Tesla, finding a new strategy for this era of competition is key to entering a new phase of development.

This is why we see Tesla conducting global layoffs, particularly among front-line sales staff.

III

When Tesla, at the top of the new energy vehicle food chain, feels the chill, it may trigger a top-down reshuffling of the entire market.

Other new energy vehicle brands may follow suit, leading to a deep reshuffling of the industry.

A new phase of evolution in the new energy vehicle market may be about to begin.

Setting aside the inevitable self-rescue efforts of new energy vehicle companies, what we need to focus on is that as Tesla begins layoffs, a new evolution in the industry will unfold.

For many players in the new energy vehicle sector, relying solely on crude and simplistic development models or flashy presentations will inevitably lead to increasing difficulties and challenges.

Only by continuously improving the product quality of new energy vehicles to win over consumers and carve out a share in the existing market can they find a new path forward.

This can be seen in how domestic new energy vehicle players are deepening and solidifying their efforts in the sector.

On one hand, new energy vehicle players are expanding and optimizing their product lines.

Whether it's expanding from sedans to sports cars and MPVs or improving the hard metrics of new energy vehicles like battery range and smart features, we can see that automakers are putting more effort into their product lines to find new solutions.

Tesla has also begun exploring and implementing this direction.

The once-popular Cybertruck was born under this very backdrop.

It is foreseeable that for Tesla, continuously expanding and optimizing its product line and focusing on product quality to find new growth may be the key to weathering this new chill.

On the other hand, the new energy vehicle market is entering a new phase of innovation.

If we summarize the development of Tesla and other automakers, their growth has been a process of 野蛮 expansion and crude development.

During this phase, there has been little breakthrough in technological innovation for new energy vehicles.

While such crude development can achieve some growth, once it becomes unsustainable, everything may have to start anew.

We all know that when Xiaomi SU7 was launched, Jia Yueting, far across the ocean, called out to Xiaomi and Lei Jun, urging innovation in new energy vehicles to drive the industry forward.

This clearly shows that the new energy vehicle industry has moved beyond the era of relying on concepts and flashy presentations for growth and has entered a new phase where innovation and originality are key.

For any player looking to make an impact in this phase, continuously improving their originality and 创新能力 is crucial to succeeding in this new competitive landscape.

Third, the ecosystem of new energy vehicles needs to be continuously 完善。

Almost every automaker entering the field does not just aim to build cars but also hopes to create a new ecosystem that connects with the internet era and the emerging AI era.

For players like Tesla，完善 the automotive ecosystem and making new energy vehicles the core of this ecosystem to bridge the internet and AI eras is key to unlocking new 想象空间。

Earlier, Tesla's "Starlink Project" and Nio's venture into smartphones are direct examples of efforts to 完善 the new energy vehicle ecosystem.

For any player looking to make an impact in this new phase, continuously enriching the ecosystem of new energy vehicles and opening up new 想象空间 is the key to entering this new stage.

Conclusion

It is no exaggeration to describe Tesla's global layoffs as "loneliness at the top."

Through these layoffs, we should not just see Tesla's developmental 瓶颈 but also recognize the 转型 and 升级 facing the new energy vehicle market.

For new energy vehicle players, only by continuously adapting to market changes and finding targeted strategies can they truly enter a new phase of development.

As Tesla feels the chill, a reshuffling of the new energy vehicle market may be about to begin anew.

In this new reshuffling, who will be next? Let's wait and see!$Tesla(TSLA.US)

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Author: Meng Yonghui, Senior Writer, Columnist, Industry Observer, Influencer, Digital Economy Scholar.