((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Added number of Supercharger stations in China to paragraph 17, updated stock price decline) by Joseph White, Akash Sriram and Nora Eckert
Elon Musk’s abrupt decision to lay off employees who ran Tesla’s electric vehicle charging business blindsided automakers preparing to equip new EVs for customers to use Tesla’s Supercharger network, they said Tuesday. industry executives and analysts.
For now, General Motors GM.N , Ford FN and other automakers that struck deals last year to give customers access to the network have said they are not changing their plans.
Tesla’s decision to open its network to competing EV makers was praised by US President Joe Biden, and paved the way for Tesla to secure federal grants to expand the reach of its North American Charging Standard system. NACS).
Musk’s decision to fire the company’s manager, Rebecca Tinucci, and most or all of the staff who operated and maintained the system, according to two former employees and numerous LinkedIn posts, has left automaker officials and Tesla suppliers in uncertainty about the future.
Tesla did not respond to requests for comment.
Musk later said on existing sites”
Andres Pinter, co-CEO of Bullet EV Charging Solutions, a network provider, said: “As contractors to the Supercharger network, my team woke up with a kick in the ass this morning.”
“Tesla has already received money under the federal government’s NEVI program,” he said at , referring to the National Electric Vehicle Infrastructure program which provides funds to states to deploy networks charging electric vehicles. “There’s no way Mr. Musk is going to give up effectively free money. It’s possible that Mr. Musk will rebuild the EV charger team bigger, badder, and brawnier.”
GM and Ford, in separate statements, said they were not changing plans to equip their EVs with connectors that will allow drivers of Chevrolet, Cadillac or Ford-branded EVs to charge at Tesla stations.
“We have nothing new to announce regarding our plans,” GM said. “We continue to monitor the situation regarding changes to the Supercharger team and potential impacts, but have no further comments or updates at this time.”
NOTHING IS EXCLUDED
Some executives and industry analysts have said Musk could have disbanded the existing Superchargers organization to put together a leaner, less expensive team to manage operations.
However, Musk made it clear during a call with analysts earlier this month that he is focused on opportunities in the areas of artificial intelligence, robotics and autonomous robotsaxis.
“In this layoff, nothing is off the table,” said Dan Ives, an analyst at Wedbush Securities. “Musk is trying to send a signal internally that the difficulties Tesla is going through are going to force them to make tough decisions. … This shows that they are seriously focused on costs
Last week, Tesla reported a decline in first-quarter profits () and a first drop in quarterly revenue since 2021. Even after a rise over the past week, Tesla shares are down ‘around 26% for the year.
In China, the company’s second-largest market, where Mr. Musk visited unannounced last weekend to discuss a potential rollout of his Tesla advanced driver-assistance system has more than 1,350 Supercharger stations, according to a list posted on its website.
With Tesla’s electric vehicle sales declining and profit margins coming under increasing pressure, Mr Musk may cut spending on the Supercharger network to conserve cash for other projects with greater growth potential, according to analysts.
“Tesla is looking to right-size its capital expenditures and operating expenses over the next two years as the company is in a slower growth phase,” said Seth Goldstein, an analyst at Morningstar.
More traditional automakers could cling to a business that promises steady revenue and near-continuous data exchange with customers, analysts say. But Mr. Musk might take the view of a Silicon Valley entrepreneur, that charging is a legacy business that could be streamlined or even divested.
“I think now that the industry has adopted the NACS standard, it views charging less as a strategic moat and more as a cost center,” said KC Boyce, vice president of data analytics firm Escalent.
Tesla’s Supercharger network could have significant value if Musk wanted to sell it, analysts say. Competing charging networks in the United States have faced reliability issues and don’t have the scale or prime locations that Tesla has locked down.
Seven major automakers, including Mercedes MBGn.DE , GM, Stellantis STLAM.MI , Honda 7267.T , BMW BMWG.DE and Hyundai-Kia 005380.KS formed a joint venture called Ionna last year to develop a charging network fast in order to compete with Tesla’s Supercharger network.