The accelerated drop in demand for electric vehicles shows no sign of slowing. Tesla (TSLA) said on April 16, 2024, that it would cut 10% of its workforce (14,000 staff). CEO Elon Musk cited role duplication as the reason for the job cut. However, weak EV demand and higher competition are the likely reasons.
Last year, China’s new energy vehicle (NEV) giant BYD took the crown of the biggest producer. It recorded over 3 million units sold. This is more than Tesla’s 1.84 million. Although BYD sells far cheaper vehicles with lower ranges and includes hybrids, it is a significant threat to Tesla.
U.S. competitors with plenty of funding are struggling to lower their losses. Lucid Motors (LCID) lost $729.9 million from operations in the last quarter as sales grew by 16% Y/Y to $172.7 million. The firm delivered only 1,967 units in Q1. Unless production accelerates, expect the firm to bleed more money.
Rivian (RIVN), an EV truck maker, lost $1.5 billion in 2024. In the first quarter, it lost $1.4 billion. For the year, the loss of around $5.6 billion will deplete its $7.86 billion in cash in around 1.5 years. Fortunately for Tesla, thanks to brand awareness, its Cybertruck should increase throughout 2024.