(Reuters) — The day before Elon Musk fired almost all of Tesla’s electric vehicle charging division last month, they had high hopes as charging chief Rebecca Tinucci was set to meet with Musk about the future of the network, four former employees of the charging network told Reuters.
After Tinucci cut between 15 and 20 percent of his workforce two weeks earlier, in much larger layoffs, they believed Musk would confirm his plans for a massive expansion of the charging network.
The meeting couldn’t have gone worse. Musk, employees said, was unhappy with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine the fundamentals of the pricing industry, he responded by firing her and his entire 500-member team.
The departures upended a network widely seen as a signature success story for Tesla and a key driver of its electric vehicle sales. Tesla Superchargers account for more than 60% of high-speed charging ports in the United States, according to federal statistics, and the company has been the biggest winner so far of the $5 billion in federal funding for new chargers .
This account, the most detailed yet about the Supercharger shootings and their fallout, is based on interviews with eight former employees of the charging division, a contractor and a Tesla email sent to outside suppliers. Only Musk and Tinucci were present at the meeting described to Reuters; the four sources familiar with the meeting relay what they heard from the Supercharger department heads.
Tesla, Musk and Tinucci did not respond to Reuters requests for comment.
Despite the massive layoffs, Musk has since posted on social media promising to continue expanding the network. But three former employees of the charging team told Reuters they fielded calls from suppliers, contractors and power utilities, some of whom spent millions of dollars on equipment and infrastructure to help develop the Tesla network.
A letter sent earlier this month from a Tesla global procurement manager to Supercharger contractors and suppliers asked them to “please continue to innovate on any newly awarded construction projects” and stop purchases of materials, according to a copy reviewed by Reuters. “I understand that this time of change can be difficult and that it is not easy to be patient when you expect to be paid!
Tesla’s energy team, which sells solar and battery storage products for homes and businesses, has been tasked with taking over Superchargers and calling select partners to close out current charger construction projects, said three of Tesla’s former employees.
A construction contractor said Tesla employees who have contacted his company since the layoffs “don’t know anything.” The entrepreneur said he expected Supercharger projects to provide about 20% of his revenue for 2024, but is now considering diversifying to avoid reliance on Tesla.
Tinucci was one of Tesla’s few high-ranking female executives. She recently began reporting directly to Musk, following the departure of battery and energy chief Drew Baglino, according to four former members of the Supercharger team. They said Baglino had historically overseen the billing department without much involvement from Musk.
The charging team layoffs mark the latest drama in a tumultuous year for Tesla, as Musk halted or delayed several key efforts intended to spur the rapid growth in electric vehicle sales that investors had expected. Instead, Musk now says Tesla will focus primarily on self-driving cars, an extremely competitive and riskier business that could take years to develop.
The company posted its first decline in auto sales since 2020 in the first quarter, amid fierce competition from Chinese electric vehicle makers and a slowdown in global demand for electric vehicles.
Reuters reported in April that Tesla had abandoned plans for a long-awaited affordable car, known as the Model 2. This cast doubt on Tesla’s plans to build new factories in Mexico and India, where Musk was expected to traveling last month to meet the Prime Minister. Narendra Modi, before canceling at the last minute. And many executives left the company amid massive company-wide layoffs.
Reduced load extension
The energy team responsible for supporting management of the charging network plays similar design and construction roles, two of the former Tesla employees said. But charging projects are fundamentally different because they are located in public places and require extensive negotiations with utilities, local governments and landowners, they explained.
The energy team was already struggling to keep pace with its current workload, two former charging network staffers said. Yet when the layoffs took place on April 30, Musk said the company was “still planning to grow the Supercharger network, but at a slower pace.” On Friday, Musk posted that “Tesla will spend well over $500 million to expand our Supercharger network to create thousands of NEW chargers this year.”
Two former Supercharger staffers called the $500 million expansion budget a significant reduction from what the team had planned for 2024 — but nonetheless a challenge requiring hundreds of employees. In an analysis provided to Reuters, San Francisco research firm EVAdoption estimates that a $500 million investment this year would result in Tesla building 77% fewer charging ports per month in the United States per month. compared to the automaker’s pace through April.
“Hold the bag”
Tesla unveiled its first Supercharger stations throughout California in 2012, with Musk calling the network a “game changer” for electric vehicles that would enable long-distance travel and convenience “equivalent to gasoline-powered cars.”
The electric vehicle charging industry requires a significant initial investment, and analysts often view it as unprofitable. But Tesla’s network was profitable before the layoffs, according to four former Tesla employees familiar with the division’s financial performance.
This is due to Tesla’s cost control and careful analysis to choose locations likely to attract business throughout the day rather than only during peak periods when electricity costs rise. A former Supercharger staffer said Tesla’s costs per charging port were typically at least 50% lower than its competitors.
Just last month, Tesla said in a securities filing that it needed to expand charging to “ensure adequate availability” for customers, especially after automakers like Ford, General Motors, Toyota and Hyundai announced that they would start making their cars compatible with Tesla charging. sockets, giving access to the Supercharger to their vehicles.
Another former employee said the rollout was “completely compromised” because there wouldn’t be enough new charging sites online, and the company was only beginning to implement upgrades to allow greater compatibility with vehicles from other manufacturers.
Three of the former employees called the layoffs a major setback for U.S. charging expansion because of the relationships Tesla employees had built with suppliers and electric utilities. Tesla has become one of the largest customers of many of the country’s major utilities, and many of them have hired new staff and planned new infrastructure based on Tesla’s charging network expansion plans, they said. said the former employees.
Other companies might be able to fill the void, former employees said, but the goodwill built over time with utilities and other contractors through Tesla’s large-scale investments in recharging will be difficult to reproduce.
“It’s just a shame that now they’re stuck carrying the bag on all these different projects,” said one of the former employees. “It’s really sad to see all these broken relationships and people being really angry – rightfully so.”
(Reporting by Chris Kirkham in Los Angeles, and Hyunjoo Jin and Abhirup Roy in San Francisco; editing by Brian Thevenot and Matthew Lewis)
yahoo
