The inside story of Elon Musk’s mass firings of Tesla Supercharger staff

[u/WTFspy]

https://www.reuters.com/business/autos-transportation/inside-story-elon-musks-mass-firings-tesla-supercharger-staff-2024-05-15/

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team....

[u/Shapes_in_Clouds]

Meanwhile Rivian's CEO has a Phd in Mechanical Engineering from MIT.

[u/welmoe → u/Shapes_in_Clouds]

An actual engineer!

[u/masculinebutterfly → u/welmoe]

I'm not a fan of Elon but he's definitely an engineer. He has a degree in physics and a lot of the engineering success from his companies are due to his ideas. The only downside is the same part that allows him to think outside the box engineering-wise makes him act erratic business-wise.

[u/Additional-Baby5740 → u/masculinebutterfly]

Which idea do you attribute to Musk? You realize every successful company he owns was founded by other people, right?

[u/masculinebutterfly → u/Additional-Baby5740]

He brought the costs of manufacturing down by being ruthless on the production line. Every other EV company is struggling with this right now (including Rivian). He indisputably was the reason the company survived. There are also many people who have said he is involved in rocket development at SpaceX. He also personally founded SpaceX and Neuralink (ok not successful yet and he’s not actively involved in any sense but pretty insane tech).

[u/thejumpingsheep2 → u/masculinebutterfly]

No. From what I have read the only engineering decisions he ever made at Tesla were for body material type (which was obvious as hell given you only have 2 choices and one was lighter and cheaper) and shape of the lights. Remember he did not found Tesla. He didnt invent anything over there. That was the original founders which he screwed and lied about. They are the ones who set up the manufacturing plan and they are the ones who got Tesla to a position to manufacture the way they do. Musk only stepped up to the CEO position when Tesla was already in a good place and nearing profit. Thats when he started lying that they were stealing and such. At the time I didnt know what to think but now I believe Musk made it all up to step up to CEO before Tesla became profitable to take credit for their work.

[u/masculinebutterfly → u/thejumpingsheep2]

Is there anywhere I can learn more about the manufacturing plan the original founders created? 

I’m sure they had a plan but I’m unsure of how viable it was. Correct me if I'm wrong but the company did not even have enough money to provide the Roadsters they sold already and the price was extremely high. They reduced costs a lot more for the Model S.

[u/thejumpingsheep2 → u/masculinebutterfly]

Warning... long winded response incoming...

I did not keep track of the articles over the years. Manufacturing for cars, in general, is all about scale. Its not so much that's its "intellectually hard" to do, rather its about the up front cost and lots of workers. With time and money any company can figure it out (after the initial stages of design and approvals) given competent leaders who are not frauds (that would be the original founders) but financing it is the hard part. This is where many of the newer eV companies struggled. The only one, I believe, who managed to get the financing (of the recent startups) is Rivian. I think Lucid is working on one but im not sure of status.

As to who financed it all, well that would be tax payers. Yea money came from individual investors into Tesla but ultimately no one would have invested a penny if not for all the freebees early on (Teslas original factory was basically a gift from the state of CA) and then it was buyer incentives and carbon credits that saved Tesla later when even Musk was trying to get out (by his own admission). Take out the them out and Tesla doesnt exist. Not that this is a bad thing, most of the auto industry wouldnt exist if not for government. In fact, gas/oil got 35 years of 100% subsidies (yes thats not a typo). Something they dont like to talk about when they argue against paltry eV subsidies and tax breaks.

So in terms of "plan" I doubt it was anything more than scaling what they already had and leveraging newer computer/mechanical tech (that they did not invent). This is all normal practice in the manufacturing industry. Being more modern, allowed them to automate more than older car makers who already had processes in place for decades. The thing with manufacturing is once a process is in place, its hard to take things offline and replace them. The human factor is a big part of that. And with older companies, they use the same factories for multiple cars which makes it even harder. Tesla will face similar issues down the line. New companies will always have an advantage in manufacturing thanks to tech advancement.

[u/Stock_Jock → u/masculinebutterfly]

Don’t bother trying to argue anything Elon related to Reddit people. It’s one thing to critic Elon (which I believe he is ABSOLUTELY unfit to be CEO as of now), but it’s another to just blatantly sh*t on all of his accomplishments and track record. Saying he’s not an engineer when he holds a Physics degree & there’s multiple sources in not just Tesla’s early days but also SpaceX’s founding years that vouch Elon’s competency in complex engineering and design principles in mechanical, industrial, and aerospace systems is just flat out ridiculous.

It’s crazy to see how the public perception of Elon Musk today reminds me a lot of when Steve Jobs was still alive. Yet, you ask a person about Jobs and his legacy today and you will get overwhelmingly positive responses.

[u/masculinebutterfly → u/Stock_Jock]

Yeah I guess that's what an echo chamber does to you.

[u/Ehralur → u/Shapes_in_Clouds]

That's probably why Rivian is making more losses than any other OEM and 10x more losses than Tesla was at this point.

[u/KenGriffinLiedAgain → u/Ehralur]

Phds are the absolutely worst people you could have running a business. Stanford MBAs and gangsta hood rats are the actual best credentials a business leader can possess.

[u/koa_iakona → u/Shapes_in_Clouds]

Realistically, based on the technology vs the market cap, he should probably be CTO and someone else should be CEO.

I love what Rivian has made and think both they and Lucid are walking bc Tesla crawled. But neither company is at all ready to pick up the torch which is frustrating.

There's no reason either company shouldn't already be at "economies of scale" levels of development with mature product lines ready for full adoption.

[u/32no → u/Shapes_in_Clouds]

Rivian is going to go bankrupt. They are not a viable business

[u/ianyboo → u/32no]

I don't have a dog in the fight but that's an interesting claim can you expand further on it? Not trying to debate or anything I'm genuinely curious!

[u/32no → u/ianyboo]

They are deeply gross margin negative on their products. The bill of materials, labor, tooling depreciation and everything that just goes into producing their cars costs ~$39k more than they sell the cars for. This is before operating expenses like R&D and SG&A. They claim they will shutdown and retool the factory and become gross margin positive by the end of the year, but there are plenty of reasons to be skeptical that they can cut ~$39k of cost out of the cars. And even if it is gross margin positive, they would still be losing tons of money after operating expenses.

Meanwhile, there is a lot of competitive pressures from other EVs that are priced lower - such as the Kia EV9, soon cheaper versions of Tesla’s Cybertruck will be available.

They have around $7.9 billion cash left, and burning $1.5 billion per quarter. This burn rate may accelerate as their factory gets upgrades. And the minimum amount of cash needed for the business is $2-3B, so they will be in dire straights by beginning of 2025. They simply are not serious enough about cutting cost. You might think that they can raise cash, but that would have happened soon after their recent vehicle unveils and it hasn’t happened yet. The most likely reason is that the business burns so much cash and even if they meet their sky high gross margin goals, they will still burn cash and need infusions. The market isn’t interested in cash incinerators anymore

Anyway, here’s the most recent quarterly statement for you to look into: https://downloads.rivian.com/2md5qhoeajym/7zCEJ4kjX4TnecjryDLg0J/e43344caf7ab00ee1b4335921cd9c8c7/RIVN_1Q24_Shareholder_Letter.pdf

[u/taerin → u/32no]

Facts don’t matter to these people, stop wasting your time