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Tesla Cybertruck Delays Deepen, Stock Plummets 30% Since January, Mass Layoffs Rumored

Last Updated April 16, 2024 8:50 AM
Samantha Dunn
Last Updated April 16, 2024 8:50 AM

Key Takeaways

  • Tesla’s cybertrucks face further delays after postponing scheduled deliveries.
  • Technical issues were identified, and shared by owners on social media.
  • Job cut rumors have surfaced on social media, with high-profile employees posting their farewells on X.

In the latest setback for Tesla, the company has announced further delays in the delivery of its Cybertruck due to a newly identified issue with the vehicle’s accelerator pedal.

Tesla has communicated to several reservation holders that deliveries have been postponed due to “unexpected delays,” stirring concern among potential owners and investors.

Product Delays, Lawsuits, and Faulty Manufacturing

Members of the Cybertruck Owner’s Club initially flagged  the delay notifications, which were devoid of specific details, on their forum and social media platform X.

As discussions intensified, it was revealed that the root of the delay was a design flaw in the Cybertruck’s unique floor-mounted accelerator pedal, where the cover could shift from its position when excessive force was applied. This issue was exacerbated by residual lubricant left during manufacturing, impacting the pedal’s functionality.

Tesla has since halted the delivery of all Cybertrucks and is actively working to redesign the pedal cover to address the lubricant residue issue.

Deliveries are reportedly anticipated to resume on April 20, with the date playfully coinciding with the cannabis culture’s 4-20 celebrations, a nod perhaps to CEO Elon Musk’s infamous past with the date. However, Tesla warns that due to the pause in deliveries and the logistical challenges of distributing the new parts, some customers might face additional delays.

The electric car maker shared timelines  of their cybertruck in October last year but has since delayed both production and delivery.

Layoff Rumours – Biggest Job Cuts Yet?

As Tesla fields product delays and legal battles, the carmaker is reportedly preparing for mass layoffs. Tesla hasn’t yet confirmed this but reports reference an internal memo  confirming job cuts of over 10% of employees.

Amid these rumors, several high-profile Tesla employees  including Drew Baglino – SVP of Powertrain and Energy at Tesla, have announced via X they are leaving the company. Whether or not they were terminated is not clear.

Despite these challenges, Tesla continues to ramp up the production of the Cybertruck at its Gigafactory in Austin, Texas, with recent estimates suggesting production rates nearing 1,000 units per week . The company has not let up on its promotional efforts either, recently showcasing the Cybertruck at various international events.

Short Sellers Capitalize on Robotaxi Announcement

As Tesla grapples with these production issues, short sellers  are finding silver linings, capitalizing on the gains from Tesla’s burgeoning Robotaxi initiative.

Elon Musk’s recent announcement of Tesla’s Robotaxi launch date saw short sellers betting on the separate venture. Despite dropping by over 30%  from the year’s start, someTesla investors see an opportunity beyond its immediate challenges.

The decision to focus on an $80,000-120,000 niche Cybertruck, which lags behind competitors in every aspect except acceleration, seems increasingly questionable. The choice to scrap a more affordable $25,000 car in favor of pursuing a distant Robotaxi future—which faces immense technological, regulatory, and market acceptance challenges—seems like a mistep in Tesla’s strategic direction.

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