Tesla needs to focus more on 'car company problems': Analyst

Tesla (TSLA) is rehiring back some of its Supercharger team which were laid off last month, according to Bloomberg. This comes after CEO Elon Musk posted on X (formerly Twitter) that the EV maker was all in on expanding its Supercharger network with an investment of over $500 million in spite of headcount reductions and recent executive departures.

ROTH Capital Senior Research Analyst Craig Irwin sits down with Catalysts to talk about Tesla's Supercharger road map and which areas the auto company should be prioritizing.

They got to show they can they can get growth going again right? When you decline 7 or 8% you've got to actually show that you can get to positive growth again. That's not particularly easy. They're going to have to cut price, they're going to have to be aggressive," Irwin states. "And they're going to have to lay out a path to the mini car, the cyber taxi, robotaxi, whatever it's going to be. Where's the growth going to come from? they've got a lot of work to do with investors."

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This post was written by Luke Carberry Mogan.

Video transcript

Hiring back some of its recently laid off supercharging team.

That's according to reporting from Bloomberg, this comes after the maker laid off 10% of its global workforce last month, including some of the charging team members break down what this means for the company.

We've got Craig or when Rock Capital, senior research analyst, Craig, thanks for in studio, we appreciate it.

So I wanna just start on the U turning that we've seen here.

What do you make of this pivot back for Elon Musk?

Yeah.

You know, he, he tends to make kind of absolutist uh decisions and then uh vacillate around like oops, right?

So they have a capital program they need to execute on um you know, deliveries might not be the trajectory they plan for or hope for this year.

Um But there's a lot of money that's been invested in expanding the supercharger network.

And you know, they're basically gonna be giving a big gift away to industry unless they execute on supporting customers like WW et cetera with, with their build out plans.

Do you think they will be able to do that?

They can definitely, they have the capital, they have the capability.

Um They've spent the money, you know, they need to have the staff there to support the, the completion of these, of these projects.

Is there any headwind for Tesla though, on the likes of BP, who had tried to kind of sniff around the real estate that they had potentially given up and now Tesla's back or is BP?

Just so the, the headwinds for Tesla haven't, haven't really been discussed a whole lot in the charging side.

So Tesla was denied from the direct procurement in New York State.

And there have been several other instances where they've had zero share in some of the nev money.

So Mr Musk has made some uh political mistakes in the way.

He's uh been out there fairly aggressive with rhetoric and it's come back to bite him on the capital access side or the, the, the support side uh for the growth of his ev charging network.

I'm sure that's driving his frustration with the business, but you know, Tesla is a great company.

They have the best network out there.

It's gonna stay the best if they don't invest any more dollars right now for a while.

Um But it's, it makes economic sense for them to bring people back.

Craig just more broadly speaking right now, the next couple of months for Tesla, what is that going to look like?

Because it seems like you, it's nothing new when it comes to Musk.

Obviously, he's a man of making headlines.

I think if you are invested in the stock, you're pretty used to some of the turmoil that has played out over the last several months, several quarters, early several years.

But the next couple of months could potentially be critical here when we're talking about the fact that obviously inflation is still a real issue in the middle of a pricing war.

You have lots of questions just about sluggish demand.

So where does that then position Tesla?

So they gotta show they can, they can get growth going again, right?

When you decline 7 8% you've got to actually show that you can get to positive growth again.

You know, that's not particularly easy.

They're gonna have to cut price, they're gonna have to be aggressive.

Um and they're gonna have to lay out a path to the mini car, the Cyber taxi, Robo, taxi, whatever it's gonna be.

Where's the growth gonna come from?

They, they've got a lot of work to do with investors.

How much, how much do you, you just said that they're gonna have to lower prices again by how much I wouldn't be surprised to see another cumulative 20% price cuts in the next year.

And what kind of pressure is that gonna put on margin, margin, margin will keep going down?

I mean, I don't think margins are going up anytime soon, right?

They're gonna need, they're gonna need another vehicle platform to actually start driving margins again.

They're gonna have to innovate their way out of this mess.

They have car company problems and tech company aspirations and they need to focus on being a car company and solving the car company problems.

Well, then what product do they need to come first?

What would potentially be a saving day for Tesla right now?

So the one they should have launched literally four or five years ago is the mini car, right?

If they'd have launched it, the supply chain would be in place for them to have, you know, mid to high teens margins, right?

They could have been building it in Germany or in India and they're just late and this vacillation around where and when obviously Tesla, Tesla decided that that um Texas is not the location.

That makes sense, right?

Texas is not where you want to build a small car that's really best sold in Europe.

You want to build it in Europe or you want to build it into another market like in India that will supply in um you know, there are so many problems they have to fix at Tesla right now for them to be going through um significant 10 to 20% head pound cuts right now is is problematic.

They need their best people working hard.