Tesla is taking drastic measures to avoid the e-car slump. But they are not alone. Other automakers are likely to follow suit.
Frankfurt – Elon Musk had big plans for the only European location of his electric car company Tesla. The Tesla factory in Grünheide near Berlin opened its doors in March 2022 and today employs more than 12,000 people, including 1,500 temporary workers. Difficult times are now beginning: the threat of job cuts is unsettling employees.
After the announcement of job cuts at Tesla, car expert Frank Schwope expects staff cuts at other car manufacturers as well. “Tesla is now also making job cuts that automotive suppliers decided on months ago. Other car manufacturers are likely to follow,” reported Schwope. He also sees 2024 as a “slack” year for electromobility. Car expert Ferdinand Dudenhöffer said: “Tesla is sitting on factories that are not flexible and are too big. The growth model is now breaking down because the market is coming to its knees.”
First layoffs in Grünheide: Tesla is initially expected to lay off 300 employees
The US manufacturer Tesla wants to cut more than ten percent of its jobs worldwide in view of the slump in electric car sales. It is still unclear to what extent the announcement by company boss Elon Musk will affect the only European factory in Grünheide near Berlin. According to
reports from
Business Insider,
Tesla wants to let go of 300 employees at its German location in Grünheide. Accordingly, temporary workers will initially be affected by the job cuts starting next Monday.
Among other things, the electric car company is feeling the effects of the tough price war in the largest car market, China, and in the first quarter it delivered surprisingly fewer vehicles worldwide than a year earlier, at almost 387,000 cars. In Germany, the loss of purchase premiums for electric cars is having an impact on sales of battery-powered cars.
Job cuts at VW: A new normal in the automotive industry?
VW is not spared either. Due to the weak demand for electric cars and the current market situation, Volkswagen did not extend temporary contracts at the Zwickau electric car plant at the end of last year.
A spokesman announced that the company had guaranteed permanent positions for 540 employees on fixed-term contracts. “However, given the current market situation, we cannot extend 269 fixed-term contracts that are about to expire after a twelve-month period,” he continued.
The rapid rise and rapid fall of electric car manufacturers?
The electric car industry is not only confronted with increased workforce cuts, but also with a wave of bankruptcies. Do the job cuts indicate a possible crisis?
The German electric car start-up,
Electric Brands
, announced at the beginning of the year that it was in financial difficulties. The protective shield procedure, a special type of procedure under German insolvency law, was applied for and approved at the Darmstadt district court, reported the industry portal
Automobilwoche
.
According to reports in
WirtschaftsWoche
, German electric vehicle manufacturer
Next.e.Go Mobile SE
has also filed for bankruptcy. This came just a few months after the company completed its IPO. Fisker, a US electric car manufacturer, is also in financial distress. The company had to stop production and is struggling with high debts. An impending insolvency could follow.
Supplier problems: Expert warnings go unheeded
The construction of electric cars is less complex than that of combustion engines. Worldwide, the transition to the age of electric drives is proving to be challenging. The German auto industry in particular is struggling with this. According to
reports from
Capital
, experts have been warning for many years that electrification - particularly among German suppliers and engineering companies - is endangering many jobs.
And that's exactly what's happening now: The major auto suppliers have announced that they want to save thousands of jobs each. Continental announced in mid-February that it would cut 7,150 jobs worldwide in the automotive supply business. The ZF Friedrichshafen works council fears significant job cuts, which could result in up to 12,000 employees losing their jobs. At Bosch, 1,200 jobs are to be cut worldwide, including up to 950 in Germany.
Car expert predicts “slack year” for electromobility
“For an American company, a job cut of 10 percent in times of crisis is nothing surprising; hire and fire happens much faster there,” said Schwope, referring to Tesla. The car expert is a lecturer in automotive economics at the Hanover University of Applied Sciences for Medium-Sized Businesses.
Schwope does not expect a long-lasting crisis for Tesla in Europe. “However, 2024 is likely to be a slump year for electromobility.” The expert estimated that the year 2025 should bring renewed growth for electromobility in view of the stricter emissions regulations that will then apply.
Electric car manufacturers demand planning security from politicians
From his point of view, electric car manufacturers need planning security and no “hush and hot” in politics. “Abrupt changes to funding conditions are a catastrophe in this respect.” This would unsettle customers. However, bonuses for electric cars are not necessary for manufacturers at all, emphasized Schwope. Because car manufacturers have earned very well in recent years.
According to an analysis, the largest car companies set records in terms of sales and profits last year. Tesla recorded the largest decline in 2023 in the average EBIT margin, which relates operating profit to sales.
Dudenhöffer also sees responsibility for the slump on the federal government
Car expert Dudenhöffer sees the reason for the slump in sales of electric cars in politics in Berlin and Brussels. “Politicians have destroyed capacity utilization by questioning electromobility.” Dudenhöffer also referred to the abrupt end of funding through the environmental bonus for private individuals.
Tesla now has to see how it can make adjustments in the face of large excess capacities. “Personnel costs are the lesser evil,” said Dudenhöffer. Tesla needs a lot of money for the machines in its highly automated factories. The electric car manufacturer cannot “switch” between combustion cars and electric vehicles like other German manufacturers. Dudenhöffer expects that Tesla will not stick to its expansion plans in Grünheide. “Nothing will happen in the next five years.”
With material from dpa.