- This year presented an opportunity for Tesla to build on last year’s positive developments and move away from the chaos that characterized 2018.
- But so far, little has changed in 2019.
- Even celebratory announcements, like the introduction of the $35,000 version of the Model 3 sedan and the unveiling of the Model Y SUV, have been accompanied by concerns about their implications.
If the first three months of 2019 are any indication, Tesla is set for another eventful, turbulent year.
In 2018, the electric-car maker achieved major successes — impressive Model 3 sales, its first consecutive profitable quarters — that were tempered by a number of challenges and controversies, including a Securities and Exchange Commission (SEC) lawsuit against CEO Elon Musk, overwhelmed service centers, and concerns about workplace safety.
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This year presented an opportunity for Tesla to build on last year’s positive developments and move away from the chaos that characterized 2018. But so far, little has changed in 2019. Even celebratory announcements, like the introduction of the $35,000 version of the Model 3 sedan and the unveiling of the Model Y SUV, have been accompanied by concerns about their implications.
Add to that multiple rounds of layoffs, more trouble with the SEC, and a lost Consumer Reports recommendation, and Tesla has its plate full as it heads into the second quarter.
These are the biggest challenges Tesla has faced so far in 2019.
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Tesla laid off 7% of its employees in January, seven months after cutting 9% of its workforce.
Tesla had expanded its workforce by 30% in 2018 as it ramped up production of the Model 3, Musk said in an email to employees. He suggested the January layoffs were necessary for Tesla to become consistently profitable while introducing lower-priced vehicles.
But Musk had framed the 2018 layoffs as a decision Tesla would not have to repeat.
“We are making this hard decision now so that we never have to do this again,” he told employees at the time.
Tesla is known for its high rate of turnover among executive and senior-level employees, and this year has been no different.
The company’s CFO, vice president of global recruiting, and general counsel have departed this year.
A lost Consumer Reports recommendation
Consumer Reports retracted its recommendation of the Model 3 in February.
The vehicle lost its recommendation due to feedback from Consumer Reports’ annual reliability survey. Consumer Reports subscribers cited problems with the Model 3’s door handles, loose interior trim and molding, paint defects, and cracked windows.
A Tesla representative told Business Insider that it has fixed “the vast majority” of the Model 3 issues cited by Consumer Reports subscribers.
The Model 3 also topped Consumer Reports’ list of the most satisfying cars, which is based on survey data from vehicle owners. Out of a possible 100 points, the Model 3 received 99 points for its driving experience, 84 points for comfort, and 67 points for value. Ninety-two percent of respondents said they would buy the Model 3 again.
See the rest of the story at Business Insider