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Back to the Elon Musk podcast. This is a show where we discuss the critical crossroads that shape SpaceX, Tesla X, The Boring Company, and Neuralink. And I'm your host Will Walden. Tesla recently revealed A substantial investment of over $500 million to expand its Supercharger network. Now, this announcement comes shortly after the company laid off almost the entire team responsible for the network, roughly 500 employees, causing industry.
And customer uncertainty. About Tesla's commitment to expanding their infrastructure Now despite recent layoffs, this saw nearly the entire Supercharger division dismissed. Tesla plans to inject more than half a billion dollars in the development of new charging stations. This financial commitment aims to add thousands of new charges across the US, enhancing the existing network which is crucial for supporting the increasing number of electric
vehicles. Now the move to slash workforce responsible for Tesla Supercharger was a surprise to many, raising concerns about stakeholders about the future of EV adoption. This drastic step echoed Musk's previous unpredictable decisions such as the temporary closure of physical Tesla stores in 2019, which was quickly reversed following logistical challenges. Thou must declaration on X emphasize the expansion of the Supercharger network. He noted that the planned expedition edit this out.
He said that the planned expenditure would focus solely on new sites and enlarging current locations, not covering operational costs, which are significantly higher now. This is a shift that comes at a time when Tesla's Supercharger network is more open than ever before to other car brands, a move aligned with the broader industry goal of enhancing EV infrastructure across the nation.
Tesla's network has received public funding too and this contributes to the national charging infrastructure, which is a key element of the Biden administration's environmental strategy. Following these layoffs, industry experts expressed fears of the potential slowdown in the expansion of Tesla's charging facilities, including myself. Why would they slow this down? They need to expand this network
now. This network, initiated about a decade ago, plays a pivotal role in Tesla's dominance in the EV market. I don't know why they would take it away. And also, the charging infrastructure is influential with every other automaker out there, and the dismissal of the Supercharger team aligns with Musk's directive for a leaner workforce now. This because of economic pressures facing the auto industry. Right now, everything's going down, and this is part of Tesla's effort to streamline
operations and reduce costs. Despite the potential risk of slowing down its infrastructure projects And Tesla's recent financial reports reflect a dip in profits hitting the lowest mark since 2011. Company continues to invest in various sectors, including AI and battery technology, with projected capital expenditures around $10 billion this year.
Maintaining a similar budget for the following two years and the reduction to Tesla's charging team might impede the growth rate of the EV industry in North America, where Tesla chargers make up a significant portion of the high speed charging option. This development could influence the regional goals of having millions of EVs on the road by 20-30 and other companies. Watch out, Tesla. They're poised to fill the void
left by Tesla scaling back. For instance, BP has announced plans to invest in its own charging network expansion, with the oil giant looking to take over sites previously managed by Tesla. And the EV charging sector sees this reduction as a shift in competitive dynamics, with companies like EV Go and and Virus Spark quickly moving to recruit talent and expand their operations.
In response to Tesla's layoffs. And the recent layouts have not only affected the Supercharger division, but also led to the departure of Tesla's head of product Rich Otto. His resignation, announced via LinkedIn, cited the recent job cuts as disruptive to company morale and long term planning. He thinks it's short sighted, and in his LinkedIn post, Otto discussed his time at Tesla, said it was a collaborative
culture. His involvement in significant products like the Cyber Truck expressed gratitude for the opportunities and learnings, but noted that the layoffs are a critical factor in his decision to leave. And the company has indicated that it will continue its operations and fulfill its commitments to existing Supercharger sites while expanding new locations, albeit
at a more moderate pace. Tesla's strategy includes focusing on enhancing the performance and capacity of existing Superchargers, indicating a shift towards maximizing the efficiency of its current assets instead of merely expanding physical infrastructure.
And as Tesla adjusts its business model and a strategy in response to economic and operational challenges, the decisions made by Tesla will likely influence the strategic decisions of other players in the market and potentially the overall adoption rate of electric vehicles in North America. It's a significant moment for Tesla and the EV industry, suggesting a possible re evaluation of expansion strategies and changing economic conditions and corporate strategies.
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