More than a week after Tesla Motors’ firing of hundreds of employees came into public’s attention, the top honcho of one of the world’s largest carmakers has some not-so-nice words for the Palo Alto, California-based electric vehicle company.
Matthias Muller, chief executive officer of Volkswagen AG, was invited to share a few words at a major event in Passau, Germany – the “Menschen in Europe.” This event, described as a forum for international understanding, with discussions covering a vast array of topic like politics, arts, culture and business. Being the head of one of the largest carmakers in the world, Muller’s invitation into the event was next to being guaranteed. Muller, however, took advantage of the forum to hit Tesla, a rising superstar in the automotive world, especially in the field of electrified offerings.
Muller’s words against Tesla focused on three issues: small volume sales, regular quarterly losses and the firing of hundreds of employees. He remarked that while there are carmakers – like VW – that have sales of 11 million this year and have profits of between EUR13 billion and EUR14 billion, there are also companies that don’t even sell 80,000 cars annually – obviously referring to Tesla. He also noted that every quarter, Tesla is posting losses in hundreds of millions of dollars. Muller also chided Tesla for “willy-nilly” firing its workers.
Muller’s statement comes as VW is shifting its strategy to the electrification of its vehicle products, as prompted by the so-called Dieselgate emissions scandal. As VW is targeting to build more EVs – electric or hybrid versions of its cars – it might be seeing Tesla as one of its fiercest rivals in the electrified vehicle field. Muller’s harsh words could be an indication of how VW views Tesla.
Various reports have surfaced that Tesla recently fired between 400 and 700 employees, including associates, team leaders and supervisors. According to a spokesman for the California-based EV maker, the dismissals followed after a company-wide annual review. The spokesman asserted that the dismissals were not layoffs, noting some employed were even promoted and given bonuses. Furthermore, the spokesman said that Tesla would hire for the “vast majority” of new vacancies.
Despite this statement from Tesla, there were still doubts about the company’s vitality. Tesla chief executive Elon Musk had admitted difficulties in ramping up the production of the high-volume Model 3. It had promised to produce 1,500 units of the Model 3 by end of September, but managed to build just 260 examples. Since Tesla could be finding it difficult to meet its production goal for the year, the employee firings might be its approach to trim its expenses, and the thereby help its bottom line in the last quarter of 2017.