Talk about an inconvenient truth. After months of trying to explain away the gathering clouds over the electric-vehicle sector as the usual growing pains of an emerging market, the EV faithful swallowed a bitter pill this week when Tesla finally blinked.said it will lay off more than 10 per cent of its work force, more than 14,000 people, because of slowing global demand.
For those who have been paying attention, the cooling reflected in the Tesla layoffs should come as no surprise. Cracks appeared last summer when U.S. car dealers reported that almost 100,000 unsold EVs had piled up on their lots, more than twice the industry average for inventory. The reasons are well-documented. EV prices have tended to be significantly higher than those of gas-powered or hybrid models. Range anxiety has been exacerbated by the slow build-out of charging infrastructure. In the United States, a multibillion-dollar federal program launched three years ago to develop a national network of charging stations had built just one as of the end of last year.
And then came the Tesla bombshell. When the deep-pocketed beacon for the industry’s future puts it in reverse, even the thirstiest EV Kool-Aid drinker is bound to do a spit take. The bugs, however, have become bigger than breadbaskets – big enough to bite Tesla. Even Mr. Musk’s glass-half-full suggestion that the layoffs would position the company for its next phase of growth runs counter to global consumer trends.
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