Tesla remains committed to its ambitious project of constructing an electric big-rig charging corridor spanning from Texas to California, undeterred by being excluded from a lucrative federal funding program associated with President Biden’s Bipartisan Infrastructure Law. However, we have learned that the project’s original scope may still undergo modifications.

The company had been looking to secure close to $100 million from the Charging and Fueling Infrastructure (CFI) Discretionary Grant program under the Federal Highway Administration (FHWA). With approximately $24 million of its own funds, Tesla aimed to construct nine electric semi-truck charging stations spanning from Laredo, Texas, to Fremont, California.

This corridor, if implemented, would create a groundbreaking charging network that has the potential to revolutionize long-distance and regional electric trucking, making a significant contribution to the reduction of pollution in the transportation industry. Without it, however, Tesla’s commitment to revolutionize heavy-duty trucking could face even more delays than it already has.

The project, known as TESSERACT, was presented to the FHWA. It was mentioned in a slide within a lengthy 964-page filing with the South Coast Air Quality Management District. Tesla worked together with SCAQMD on the application.

However, Tesla was not on the list of 47 recipients that the Biden administration announced in January. Together, those winners were granted a staggering $623 million to construct electric vehicle charging and refueling stations nationwide. Despite Tesla’s success in winning approximately 13% of all other charging awards from the Infrastructure Act, the company has only managed to secure around $17 million in revenue.

Rohan Patel, who recently departed from his VP position at Tesla amidst the company’s 10% workforce reduction, mentioned in a message that Tesla might explore options such as state funding opportunities or future rounds of the CFI program. According to him, some of the sites along the route are obvious choices, even without funding.

The 1,800-mile route would connect Tesla’s two North American vehicle factories, as well as one that is planned but delayed in Mexico. Every station was initially planned to have eight 750kW chargers specifically for Tesla Semis, along with four chargers available for other electric trucks. It’s uncertain how successful it would be if the company couldn’t construct all nine stations, which are evenly spaced along the route.

Approximately half of the CFI funding recipients selected by the Biden administration have prioritized the expansion of EV charging infrastructure in various communities, including urban and rural areas. These efforts aim to establish charging stations at key locations such as schools, parks, libraries, and multi-family housing complexes, among others.

A significant portion of the funding was allocated to support 11 “corridor” projects, several of which are located along the I-10 corridor that coincides with Tesla’s proposed route. This allocation involves $70 million to the North Texas Council of Governments for the construction of up to five hydrogen fueling stations catering to medium and heavy-duty trucks in the Dallas, Houston, Austin, and San Antonio regions.

The Department of Transportation stated in January that the project will contribute to the establishment of a hydrogen corridor stretching from southern California to Texas.

“Funding hydrogen stations will be seen as a complete waste of money,” Patel stated in an interview.

Although he is no longer representing Tesla, he expressed his disapproval of funding hydrogen infrastructure during his tenure at the company.

On X in February, he expressed his frustration with governments worldwide for squandering tax dollars on hydrogen for light/heavy duty infrastructure. Quitting is always possible, just like giving up smoking.

There are other challenges to the project besides funding. Tesla’s recent restructuring could add another layer of complexity.

Elon Musk, the CEO of Tesla, has expressed a strong commitment to advancing autonomy within the company. It has been reported that Tesla has shifted its focus from a planned low-cost electric vehicle to prioritizing the development of a specialized robotaxi. The Semi has experienced significant delays in its production timeline, with Tesla having manufactured only a limited number of around 100 units so far.

Despite all this, the Tesla Semi program continues to gain traction among customers. Shortly after the restructuring, Dan Priestley, the head of the Semi program, took to social media to announce a promising new customer for the trucks. In March, Priestley also mentioned that Tesla has been utilizing Semis to transport battery packs from Nevada to the Fremont factory.

According to a reliable source, Tesla management informed employees on Monday that the recent layoffs, which resulted in a significant reduction of staff in certain divisions, including high-performing individuals, were primarily a result of the company’s weak financial performance.

The team was informed of the layoffs only one week prior to Tesla’s anticipated release of its first-quarter earnings. Tesla’s decision to take this step is a response to the ongoing electric vehicle (EV) price competition, which has caused a decline in the company’s profit margin for multiple consecutive quarters. In 2023, the corporation achieved a remarkable milestone by delivering a total of 1.81 million automobiles, setting a new record. However, Tesla’s profit margins were negatively impacted as they constantly reduced prices in order to increase sales and gain a competitive advantage.

Tesla has notified its employees that around 14,000 workers, which accounts for over 10% of the global organization’s workforce, will be laid off. These job cuts will affect Tesla’s businesses in the United States, Europe, and China. The layoffs, which impacted staff in all departments and at various levels of seniority, were implemented to decrease expenses and enhance efficiency in anticipation of the company’s forthcoming expansion, as stated in an internal email from CEO Elon Musk that has been accessed.

High achievers also reduce
According to two anonymous sources who spoke, a significant number of the people that were let go were highly skilled and accomplished. A source expressed astonishment at the magnitude of skilled personnel laid off and observed that a significant percentage of those impacted were engaged in projects that had been deprioritized by Tesla. The source refrained from specifying the particular projects.

According to sources, certain divisions experienced layoffs that exceeded the 10% reduction mentioned in the companywide email. Management informed me that a reduction of 20% was made to their workforce.

“I experienced a 20% reduction in my team, including some highly skilled players,” they stated.

The shakeup is occurring concurrently with Musk’s ongoing efforts to steer the company towards the development of fully autonomous vehicles. Tesla has lately abandoned its ambitions to manufacture a more affordable electric vehicle (EV) with a starting price of approximately $25,000. Instead, they have decided to utilize the ongoing development of a foundational platform to support a purported robotaxi, which Elon Musk claims will be unveiled on August 8th.

According to his biographer, Walter Isaacson, Musk made an effort in the past to give priority to the project focused on developing vehicles specifically for robotaxi services. In 2022, he informed the employees of his desire for a “clean robotaxi” devoid of any steering wheel or pedals. Tesla’s lead designer, Franz von Holzhausen, and engineering VP, Lars Moravy, clandestinely spearheaded the development of the affordable electric vehicle (EV) project and eventually persuaded Elon Musk to pursue both options. However, recent reports indicate that Musk has now reversed his decision.

High-level executives depart
Two prominent executives, Drew Baglino, Tesla’s Senior Vice President of Powertrain and Energy, and Rohan Patel, Vice President of Public Policy and Business Development, have both departed from the business.

Patel informed me that he made the decision to resign from Tesla on Sunday evening due to significant general changes occurring within the firm. Patel, who had been routinely interacting with Tesla customers and enthusiasts on X in recent months, chose not to provide detailed information. In his message, he acknowledged that it would be more prudent for him to refrain from making conjectures. “Tesla will experience a significant increase in strength and resilience, and change will be beneficial,” he further stated.

Baglino informed me that he decided to depart from Tesla after a period of 18 years. “I am satisfied with the positive influence I have had; my leadership team is competent, and the energy businesses under my responsibility are performing well,” he expressed in a message.

“Baglino’s responsibility included overseeing powerdrives and new battery projects. According to Sandeep Rao, the head of research at Leverage Shares, a financial services company based in London, there is a perception that there is currently a lack of sustainable innovation. This perception may be one of the reasons why Baglino is leaving,” speculated Rao in an interview.

Baglino’s resignation occurred shortly after the departure of Tesla’s former CFO, Zachary Kirkhorn. In January, Musk expressed his desire on X, then known as Twitter, to obtain approximately 25% voting control of Tesla. His intention is to devote more attention to the firm itself than to his other ventures and contribute to Tesla’s leadership in the fields of AI and robots.

 

Ford has officially said that it will postpone the manufacturing of two electric vehicles, specifically a cutting-edge EV truck and a three-row EV SUV. The duo is now scheduled to arrive in 2026 and 2027, experiencing delays of one and two years, respectively. Instead, the company will replace them with hybrids in its entire U.S. range.

The CEO of Ford has been indicating delays for some months. In the previous autumn, it deferred $12 billion in scheduled investments. During a financial conference call in February, CEO Jim Farley indicated that hybrids will have a progressively significant impact on our industry’s shift and will remain a permanent fixture. That is the type of serious discussion that shareholders greatly appreciate.

The decision is expected to be well-received by Wall Street, particularly in light of Toyota’s announcement that its sales in the United States increased by 22% compared to the previous year, driven by high demand for hybrid vehicles. Ford’s strategic move seems to be aimed at enhancing cash flow and immediate profitability, a prudent decision for a firm of its magnitude, particularly during periods of unpredictability.

However, it is worth noting that Ford stands out from other well-established car manufacturers in its ability to excel by adopting a startup mentality, a mindset that it seems to have embraced more lately, despite the delays in electric vehicle production. It achieves greater success when it actively influences the market rather than simply reacting to it.

Recently, Ford showcased its startup attitude through the introduction of the Mustang Mach-E, an all-electric crossover. Initially, the intention was to create a practical crossover vehicle with an electric motor located in the front, when the concept of electric vehicles (EVs) first emerged about ten years ago. The design possessed aerodynamic qualities, although it lacked inspiration to such an extent that one of the company’s exterior designers expressed doubt about its marketability. Based on the appearance of the proposed design, it was reasonable to have misgivings.

However, the then-CEO, Jim Hackett, abandoned the concept and imposed a strict deadline of two years for the team to provide an alternative solution. Ford’s achievement of securing second place in U.S. EV sales for consecutive quarters can be attributed to the successful introduction of a crossover model.

The success of the Mustang Mach-E was not a result of luck or chance. Ford has a history of performing impressive feats or achieving unexpected successes. In the 1980s, when American automakers faced significant competition from Japanese imports, Ford abandoned its bulky and weighty designs and created the Taurus, which was introduced to the market in late 1985. The car, with its elegant design, spacious interior, and reasonable price, was a novelty for American buyers and quickly became popular. In the initial three years, Ford managed to sell one million units of the product, which may be considered a triumph that probably prevented the business from going bankrupt.

After a span of five years, Ford once again changed its direction by introducing the Explorer. Although SUVs were not a novel concept, at that period, the majority of them were two-door vehicles that prioritized practical features such as towing and off-roading. Automobiles continued to be the prevailing preference among customers. However, with the addition of rear doors and a wide range of amenities, Ford successfully converted the SUV into a vehicle that is suitable for transporting families. Although the debut of the Explorer may have negatively impacted the sales of the company’s automobiles, it turned out to be a wise decision. Not only did it drive the company’s growth for another ten years, but it also anticipated a future where SUVs would dominate the market.

Additionally, Ford employed a rapid and efficient strategy in the creation of the initial Mustang, enabling it to establish a completely novel classification of swift and costly “pony cars.” After World War II, the automaker created the ’49 Ford, a vehicle that defied traditional design and propelled the company to the forefront of sales. Additionally, it is important to acknowledge the original Ford assembly line, which, although not a tangible product, was undeniably a result of entrepreneurial innovation.

Farley is currently confronted with various obstacles. His predecessors were essentially combining and selecting designs, platforms, and manufacturing procedures, while the core component of each of those vehicles, the engine, stayed mostly unchanged. Manufacturers are faced with the task of completely rethinking their approach when it comes to electric vehicles, or at the very least, removing the core components without compromising the original vehicle’s exceptional qualities.

Ford has demonstrated exceptional proficiency in several endeavors. The Mustang Mach-E and the F-150 Lightning are widely regarded as not only outstanding electric vehicles but outstanding automobiles in general.

However, these products have not achieved the level of success that Ford had anticipated. One reason for their lack of popularity is their high cost; however, recent price reductions have demonstrated that there is still a desire for them. Another contributing factor is the insufficient development of the charging infrastructure needed to support these vehicles. If the act of charging is impeding Ford’s ability to sell more electric vehicles, perhaps the company should directly confront and resolve this issue. If Ford is unable to price its electric vehicles competitively while maintaining profitability, it may be necessary for the company to explore other cost-effective methods of manufacturing.

The corporation has initiated the process by establishing Skunkworks, headed by former Tesla executive Alan Clarke, with the objective of creating an affordable electric vehicle. If the team successfully introduces a product to the market, there is a possibility that some of the entrepreneurial energy will be present at Ford.