Elon Musk announced a 10% staff reduction at Tesla, with rumors suggesting it could be even higher. This sudden downsizing may have caught many off guard. How did such a thing happen?
For a long time, due to information lag, many believed that American companies must lead. In reality, this paradigm has fundamentally shifted.
The situation at Tesla is a significant testament to American capabilities. Today, America is not only losing its manufacturing capacity but also gradually losing its R&D prowess.
When it comes to developing new energy vehicles, Tesla actually started behind BYD. Its tremendous success is largely attributed to the American capital market. Initially focused on high-end passenger cars, Tesla, driven by capital, established a strong brand presence.
In terms of technological accumulation, especially in battery technology, Tesla’s capabilities are not stronger than BYD’s. Despite gaining significant brand influence, Tesla struggled for a long time to produce and deliver vehicles on time.
Without establishing a Gigafactory in Shanghai, utilizing China’s policies, talent, and existing robust manufacturing capabilities, Tesla would not be able to produce as many products nor achieve its recent success. It can be said that without Chinese manufacturing, there would be no Tesla today.
Tesla’s lead in R&D is not substantial; it mainly relies on the power of capital and brand value.
With the emergence of Chinese smart electric vehicles from companies like BYD, NIO, XPeng, Li Auto, Huawei, Xiaomi, etc., Tesla no longer appears to have any clear technological advantages. The high-end market will gradually be eroded by competitors, or even overwhelmed. Tesla cannot produce cars like the BYD Han or Xpeng P7, and its autonomous driving technology and concepts are relatively outdated. In the vast mid-to-low-end market, Tesla has never had enough models to compete. Under the assault of numerous Chinese companies, Tesla will find itself in a passive position.
In martial arts, speed is key to victory. Today, achieving a dominant position in the smart electric vehicle sector with just a few models in the high-end segment is no longer feasible. The era of the future belongs to strong companies that offer multiple models across high, middle, and low-end markets. Continuous introduction of new models and technological upgrades is essential to leave competitors far behind.
Tesla’s current capabilities cannot achieve this goal. While Chinese manufacturing is not a problem, American R&D severely hinders Tesla’s progress. Low-end models have been delayed for years, with no SUVs or MPVs in sight. Tesla’s models appear increasingly outdated compared to the constantly innovating domestic Chinese models.
To change this situation, Tesla’s only option is to relocate its entire R&D center to China. By leveraging China’s R&D capabilities and efficiency, Tesla can enhance its R&D efficiency, strengthen its R&D capabilities, and better understand the value of new technologies, rather than clinging to outdated ones, believing that a few old technologies can dominate the smart electric vehicle sector.
If all capabilities are concentrated in China, Tesla will have a fighting chance. However, if R&D remains in the US while manufacturing moves to China, Tesla will gradually lose in this round of competition.