Another Elon Musk Promise Dies As Tesla Scraps ‘Gigacasting’ – MASHAHER

Last year, as Tesla developed a new small-vehicle platform, it aimed to punch out the underbody in a single piece, Reuters exclusively reported last September, citing five sources familiar with the automaker’s gigacasting operations. The long-term goal was to radically simplify manufacturing and slash costs.

But Tesla has since halted the effort, opting to stick with its more proven method of casting vehicle underbodies in three pieces: two gigacasted front and rear sections and a midsection made of aluminum and steel frames to store batteries, according to the two sources familiar with the matter. That is largely the same three-piece method the company has used for its last two new models, the Model Y crossover SUV and the Cybertruck pickup.

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The decision to hold off on the potential manufacturing breakthrough marks another example of Tesla slashing short-term spending as it adjusts to falling sales and profit margins, softening EV demand globally, and intensifying competition from rival EV makers such as China’s BYD. Tesla last month laid off more than 10% of its global workforce. A handful of senior executives have also resigned or been pushed out.

Such moves also reflect a fundamental strategy shift, with Tesla now focusing more on developing self-driving vehicles than on pushing for huge growth in EV sales volume, which many investors had been counting on.

On April 23, as it released earnings that missed Wall Street expectations, Tesla said it had a simpler, faster plan for producing “more affordable” cars after shelving plans for the Model 2, which was expected to cost $25,000 and be released in the second half of 2025.

Instead, Tesla officials said, it would produce affordable models using a current platform and production lines. On an investor call, Chief Executive Elon Musk declined to provide details on the planned new offerings or their target prices.

Experts in vehicle manufacturing said Tesla’s more conservative path on gigacasting is no surprise and in part reflects the pains it has experienced historically in launching complex and innovative vehicles on time. The automaker’s highly experimental Cybertruck arrived last autumn at a far higher price than predicted after substantial delays to work through manufacturing issues. Tesla is still struggling to produce the angular, stainless-steel pickup in mass-market volumes.

Musk in a recent email to senior managers outlined plans to lay off hundreds more employees, including two top executives, the Information reported.

“Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction,” Musk wrote in the email, the report said.

Two senior executives who flanked Musk on investor day last year are gone: Zach Kirkhorn, former CFO, resigned with a nondisclosure agreement, according to Tesla regulatory filings. Drew Baglino, Tesla’s former chief battery engineer, left in the wave of layoffs Musk ordered last month. Baglino dumped $181 million in Tesla stock as he left.

Rebecca Tinucci, who headed up Tesla’s charging team, was one of two women on stage for the investor day last March.

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Tinucci and much of her team were sacked this week. In a posting on his social media platform X, Musk said Tesla plans “to grow the Supercharger network, just at a slower pace for new locations and more focus on 100% uptime and expansion of existing locations.”

Another executive on the stage who left was Colin Campbell, the former vice president of powertrain engineering.

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Other senior Tesla executives, who were not among those onstage during the 2023 investor day, have left in recent weeks.

Daniel Ho, a former Ford executive and 10-year Tesla veteran who had been director of new car programs, is no longer with the company. Rohan Patel, a former Obama administration official who had been Tesla VP for public policy and key to expansion plans for India, said he is leaving.

Another executive to exit was Allie Arebalo, Tesla’s senior director of human resources, two people familiar with the matter said on Wednesday.

Martin Viecha, head of investor relations who also was on the stage last year with Musk, announced his departure at the end of an April 24 conference call with analysts.

Musk has signaled significant strategy shifts in response to falling sales and tougher competition – changes that could leave out executives running operations no longer central to the new plans.

Tesla’s future lies in artificial intelligence and robotaxis, not conventional auto manufacturing, Musk told investors in April.

Musk is putting action behind those words. He has ordered a 10% cut in staff and scrapped plans for a new, low-cost line of vehicles in favor of revamping existing models to develop lower-priced entries. Tesla said it will pause construction of new factories until the company’s sales had reached 3 million vehicles a year – enough to fill up the automaker’s existing production operations.

“If you buy the narrative that Tesla is an AI company fundamentally, it may not be cause for concern,” said K.C. Boyce, vice president at data analytics and advisory firm Escalent. “It fits into the idea of sizing and resourcing the business correctly to deliver on the promise of full self-driving and robotaxi.”

Harvey’s successor, John Roth, told reporters Wednesday that electric and gasoline powertrains “will coexist for a number of years.”

Roth did not confirm specific plans for Cadillac’s powertrains at the end of the decade, but said during a sales and business briefing that “we will be offering an all-electric portfolio by the end of the decade, and we will let the customer be our guide.”

A Cadillac spokesperson told reporters that the brand has not changed its plans to introduce EVs in multiple segments across its lineup, but the transition away from gasoline engines may be slower than anticipated.

Cadillac so far has launched the Lyriq electric midsize crossover and the Celestiq ultraluxury electric sedan. It plans to start building an electric version of the Escalade full-size SUV this year and has confirmed three new EV nameplates — the Optiq compact crossover, Vistiq three-row crossover and extended-wheelbase Escalade IQL.

Since taking over as vice president of global Cadillac last year, Roth has said the brand’s internal combustion engine and electric vehicles would coexist through the end of the decade. It was unclear Wednesday whether that could extend past 2030 as the pace of EV adoption growth has softened. Some automakers, including GM, have delayed EV investments in response to shifting consumer demand.

The recall affects certain 2022-2024 Maverick pickups, according to the NHTSA. The Body Control Module (BCM) may “inadvertently deactivate one or both rear tail lights,” the agency said.

According to NHTSA documents, the issue stems from the BCM falsely detecting a current overload on one or both of the rear position lamp circuits, resulting in one or both of the lamps to be deactivated during a drive cycle. The issue does not affect headlights, stop lamps, or turn signal functions, according to the NHTSA.

Dealers will update the BCM software free of charge and owner notification letters are expected to be mailed May 20, 2024. Owners may contact Ford customer service at 1-866-436-7332 and Ford’s number for this recall is 24S24.