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Electric Vehicles

Tesla’s Identity Crisis Gets Hardcore

With layoffs in the Supercharging division, Elon Musk is beating Tesla’s past into a pulp.

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Elon Musk fighting Elon Musk.
Heatmap Illustration/Getty Images

Chaos at Tesla is nothing new. But the company now appears to be going through something of an identity crisis, with its future at war with its past.

Let’s just recap the past few weeks: First, Tesla released first-quarter delivery numbers that came up well short of even analysts’ most cynical predictions, followed by first-quarter earnings that were, in a word, poor. In between those two events, Reuters reported that Tesla had canceled a long-promised sub-$30,000 electric vehicle (a report CEO Elon Musk denied ... sorta), and the company laid off more than 10% of its workforce.

All of which brings us to today and reports of further layoffs at Tesla, this time in the company’s Supercharging division. To just about everyone who follows the company, this was shocking news. Tesla’s Supercharging network isn’t just a competitive advantage, it’s the de facto national standard for EVs in the United States. Major automakers — Ford, Toyota, General Motors — and EV startups like Rivian have signed deals with Tesla to use its charger design, known as the North American Charging Standard and designed their new vehicles (or sent adapters) so their drivers can access the network.

The Supercharging network was, however, consistent with what might now be called the “old” model of Tesla — a company that tried to “accelerate the world’s transition to sustainable energy,” as the company’s mission statement put it, by getting as many electric cars (ideally, but not solely, its own) on the road as possible. But that model seems to be on its way out. As Musk told investors on the earnings call, Tesla should be thought of “thought of as an AI or robotics company” — not, anymore, as merely a car company.

Those Supercharging partnerships weren’t an act of charity. BloombergNEF, Bloomberg’s in-house energy research group, estimated that Tesla’s charging business could generate three-quarters of a billion dollars of profits by 2030. While it doesn’t seem like Tesla is going to rip the Superchargers from the ground, a now-former Tesla employee said on X that “further improvements to standards and engagements across the industry will suffer.” Already the company has pulled out of four planned new Supercharger locations in New York, according to Electrek.

“Tesla still plans to grow the Supercharger network, just at a slower pace for new locations and more focus on 100% uptime and expansion of existing locations,” Musk tweeted (after the market close) Tuesday afternoon.

If the future of the growth of the Supercharging network is in doubt, Tesla’s expansion of its self-driving efforts (which are still well short of rivals like Waymo’s) is full steam ahead. Close Tesla-watchers have speculated that the future of Tesla’s charging infrastructure will change as the company advances further towards truly autonomous driving and its much-heralded “robotaxi,” which Musk has promised to reveal by August 8. All of this seems to have pleased investors, who responded to the announcement by sending Tesla shares up 10% in aftermarket trading. That share price jumped again Monday, after news that Musk had paved the way for Full Self-Driving to be deployed in China.

One would think that reports of Tesla further tightening its focus on artificial intelligence and automation would have delighted these investors. The company's burned some $2.5 billion of cash in the first quarter thanks to both its extravagant spending on developing its AI capabilities and the fact that it made too many cars for what turned out to be a soft electric vehicle market. “Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction,” Musk wrote in an email to staff about the Supercharging layoffs, according to The Information. “While some on exec staff are taking this seriously, most are not yet doing so.” And yet shares were down 5.5% by the time the market closed on Tuesday.

The investment community can’t seem to decide whether it wants Tesla to be the type of company that will devote its resources to a mass market car or throw them at a much more exciting — though by no means assured — autonomous driving play.

In its earnings presentation, Tesla said that new models were coming, but not on a whole new platform, which meant that there would less capital expenditure for a new production line. For some analysts, it was all they needed to hear, Morningstar's Seth Goldstein wrote a note titled “Our Long-Term Growth Thesis Is Confirmed as Affordable Vehicle Still in Development.”

And some in the the analyst community were also jazzed by Musk's China jaunt. Morgan Stanley’s Adam Jonas, a longtime Tesla bull, hailed the trip, writing “whether Tesla’s CEO is sleeping on a floor or on a plane ... the message is clear: he’s back.” Dan Ives of Wedbush Securities, another Tesla optimist, said approval for FSD in China was “a watershed moment for the Tesla story.” As recently as Tuesday morning, Axios cautiously declared that the company “may be steadily regaining investor confidence after a rough patch.”

Tesla is also working on wireless charging, as was confirmed last year in a video hosted by, of all people, Jay Leno. Tesla’s design chief, Franz von Holzhausen, told Leno that “we are working on inductive charging. You don’t even need to plug anything in at that point. You just drive over the pad in your garage and you start charging.” It’s obvious why this type of charging would be more conducive to autonomous driving than the company’s exist Superchargers, as all they would require is driving over them.

Even the multiple rounds of deep layoffs are a sign to some Tesla optimists that Musk’s attention is now fully devoted to the company. When asked by an analyst on the earnings call to “talk about where your heart is at in terms of your interests,” Musk said that Tesla “constitutes a majority of my work time,” adding: I'm going to make sure Tesla is quite prosperous.”

If investors are sending mixed messages, Musk, certainly, has made his preference clear. Tesla will become a autonomous driving company or die trying — at least until he changes his mind again.

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