The delivery of the Tesla Model 3 has long been plagued by challenges, with production output remaining low and inconsistent. As a major player in the automotive industry and the world's leading automaker, Volkswagen CEO Matthias Müller recently commented on Tesla’s performance, stating that the company is burning through cash rapidly and making frequent layoffs.
In a recent panel discussion about the future of the automotive sector, Müller expressed his concerns: “If the information I have is correct, Tesla is burning hundreds of millions of dollars every quarter and arbitrarily laying off employees. Where is their social responsibility?†His remarks highlighted a growing skepticism around Tesla’s financial stability and operational efficiency.
Throughout its history, Tesla has only managed to turn a profit twice. Recently, the company cut hundreds of jobs as it struggled to ramp up Model 3 production. In September alone, Tesla produced just 260 Model 3s, far below the target of 1,500 units. This underperformance has raised questions about the company’s ability to scale efficiently.
Before this, Tesla had also reduced staff in its solar division, cutting dozens of workers at its Northern California office. These repeated layoffs suggest ongoing internal challenges, despite Elon Musk’s high-profile announcements and ambitious vision.
Müller pointed out that while some companies, like Tesla, often make big headlines, their core business may not be as strong as they appear. He noted, “Some companies sell just 80,000 cars a year, while others like Volkswagen sell 11 million and generate billions in profits. If what I hear is true, Tesla is burning huge amounts of money each quarter and making arbitrary cuts. We should not compare apples to oranges.â€
It’s worth noting that Volkswagen itself faced a major scandal involving emissions fraud, which led to a $14.7 billion settlement with regulators. Despite this, the company continues to operate with a more stable financial model, highlighting the contrast between the two automakers.
As the electric vehicle market evolves, the pressure on Tesla to prove its long-term viability will only increase. Whether it can sustain its growth without burning through cash remains to be seen.
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