Tesla’s (TSLA) expansion of its Supercharger network has slowed considerably following significant layoffs from the EV giant’s Supercharger team, according to an exclusive Wall Street Journal report. While Tesla is working to rebuild the team, including rehiring some staff, the number of new Supercharger ports has dropped significantly.
Tesla’s Supercharger Network Expansion Declines
Specifically, according to the WSJ report, citing data from the analytics firm EVAdoption, the number of new Supercharger ports opened between May and August fell 28% year-over-year. Moreover, for the first eight months of 2024, the total number of new ports decreased by 11% year-over-year. This decline is particularly significant given the recent investments in the network.
Despite these setbacks, it is important to note that the decline comes even as the company received millions in government funding earlier this year to install chargers in states like Maryland and Arizona. Consequently, Tesla is under mounting pressure to expand the network and make it accessible to non-Tesla drivers as well.
To address this, the company has entered into agreements with automakers such as Ford (F) and Rivian (RIVN) that already use Tesla’s plug-in technology. Nevertheless, other automakers are expected to follow suit, though software issues and problems with distributing the plug-in adapters required by non-Tesla customers have caused delays.
What Caused the Disruption in TSLA’s Supercharger Network?
Given these challenges, it’s clear that Tesla’s Supercharger network, known for its reliability with 6,500 charging locations globally, has been disrupted by the recent layoffs. Specifically, the company laid off the entire Supercharger team, including its head, Rebecca Tinucci. Although Tesla has rehired some team members, the group is now smaller and continuing the expansion at a slower pace. In response, earlier this year, Tesla’s founder and CEO Elon Musk stated that the company would invest over $500 million to build new chargers this year.
Furthermore, it is worth noting that Tesla has secured around $37 million in public funding to build 88 Supercharger stations in the U.S., making it a top recipient of a federal program designed to expand access to EV charging.
Is Tesla a Buy, Sell, or Hold?
Analysts remain sidelined about TSLA stock, with a Hold consensus rating based on 12 Buys, 16 Holds, and eight Sells. Over the past year, TSLA has declined by more than 10%, and the average TSLA price target of $208.98 implies a downside potential of 7.8% from current levels.
