Tesla plans 7% staff cut as CEO Elon Musk says company must ‘work harder’

Tesla broke ground earlier this month for a factory in Shanghai, its first outside the US, to produce the Model 3 there. (AP)
Updated 18 January 2019

Tesla plans 7% staff cut as CEO Elon Musk says company must ‘work harder’

  • Tesla delivered over 245,000 electric cars and SUVs last year, nearly as many as all previous years combined
  • But its 2018 production fell far short of a goal set nearly three years ago of manufacturing 500,000 vehicles for the year

Saying the road ahead was “very difficult,” Tesla’s CEO Elon Musk said Friday that the company would be cutting its staff by about 7 percent.
The electric car and solar panel maker notified its employees about the staff cuts and other plans in an email posted on Tesla Inc.’s website.
Musk said Tesla hopes to post a “tiny profit” in the current quarter but a 30 percent expansion in its workforce last year was more than it can support.
Tesla’s shares tumbled earlier this month after it cut vehicle prices by $2,000 and announced fourth-quarter sales figures that fell short of Wall Street estimates.
“Our products are too expensive for most people,” Musk said in the memo to Tesla staff, saying the company has to “work harder.”
“Tesla has only been producing cars for about a decade and we’re up against massive, entrenched competitors,” he said.
Musk said in a tweet in October that Tesla, based on Palo Alto, California, had 45,000 employees. A 7 percent cut would involve laying off about 3,150 people.
“We unfortunately have no choice but to reduce full-time employee headcount by approximately 7 percent ... and retain only the most critical temps and contractors,” he said.
The company says it delivered over 245,000 electric cars and SUVs last year, nearly as many as all previous years combined. But its 2018 production fell far short of a goal set nearly three years ago of manufacturing 500,000 vehicles for the year. That goal was announced in May of 2016 based on advance orders for its mid-range Model 3, which Musk said sells for $44,000.
Musk said Tesla plans to ramp up production of the Model 3, “as we need to reach more customers who can afford our vehicles.”
“Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity,” he said in the memo, “but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause.”
Tesla broke ground earlier this month for a factory in Shanghai, its first outside the US. Musk said it plans to begin production there of the Model 3 and a planned crossover by the year’s end.
Tesla and other global automakers including General Motors Co., Volkswagen and Nissan Motor Corp. are pouring billions of dollars into manufacturing electric vehicles in China.


Electric luxury vehicles, SUVs ‘more likely to cause accidents’

Updated 23 August 2019

Electric luxury vehicles, SUVs ‘more likely to cause accidents’

  • As EV sales rise, French insurer AXA warns that drivers are struggling to adapt to cars’ rapid acceleration

LONDON: Electric luxury cars and sport utility vehicles (SUVs) may be 40 percent more likely to cause accidents than their standard engine counterparts, possibly because drivers are still getting used to their quick acceleration, French insurer AXA said.

The numbers, based on initial trends from claims data and not statistically significant, also suggest small and micro electric cars are slightly less likely to cause accidents than their combustion engine counterparts, AXA said at a crash test demonstration on Thursday.

AXA regularly carries out crash tests for vehicles. This year’s tests, which took place at a disused airport, focused on electric cars.

Overall accident rates for electric vehicles are about the same as for regular cars, according to liability insurance claims data for “7,000 year risks” — on 1,000 autos on the road for seven years — said Bettina Zahnd, head of accident research and prevention at AXA Switzerland.

“We saw that in the micro and small-car classes slightly fewer accidents are caused by electric autos. If you look at the luxury and SUV classes, however, we see 40 percent more accidents with electric vehicles,” Zahnd said.

“We, of course, have thought about what causes this and acceleration is certainly a topic.”

Electric cars accelerate not only quickly, but also equally strongly no matter how high the revolutions per minute, which means drivers can find themselves going faster than they intended.

FASTFACT

Accident rates among luxury and SUV electric vehicles are 40 percent higher than for their combustion engine counterparts.

Half of electric car drivers in a survey this year by AXA had to adjust their driving to reflect the new acceleration and braking characteristics.

“Maximum acceleration is available immediately, while it takes a moment for internal combustion engines with even strong horsepower to reach maximum acceleration. That places new demands on drivers,” Zahnd said.

Sales of electric cars are on the rise as charging infrastructure improves and prices come down.

Electric vehicles accounted for less than 1 percent of cars on the road in Switzerland and Germany last year, but made up 1.8 percent of Swiss new car sales, or 6.6 percent including hybrids, AXA said.

Accidents with electric cars are just about as dangerous for people inside as with standard vehicles, AXA said. The cars are subject to the same tests and have the same passive safety features such as airbags and seatbelts.

But another AXA survey showed most people do not know how to react if they come across an electric vehicle crash scene.

While most factors are the same — securing the scene, alerting rescue teams and providing first aid — it said helpers should also try to ensure the electric motor is turned off. This is particularly important because unlike an internal combustion engine the motor makes no noise. In serious crashes, electric autos’ high-voltage power plants automatically shut down, AXA noted, but damaged batteries can catch fire up to 48 hours after a crash, making it more difficult to deal with the aftermath of
an accident.

For one head-on crash test on Thursday, AXA teams removed an electric car’s batteries to reduce the risk of them catching fire, which could create intense heat and toxic fumes.

Zahnd said that studies in Europe had not replicated US findings that silent electric vehicles are as much as two-thirds more likely to cause accidents with pedestrians or cyclists.

She said the jury was still out on how crash data would affect the cost of insuring electric versus standard vehicles, noting this always reflected factors around both driver and car.

“If I look around Switzerland, there are lots of insurers that even give discounts for electric autos because one would like to promote electric cars,” she said.