Tesla's awful 2024 is getting much worse

Fears of layoffs at Tesla had been building along with Wall Street's growing concerns.

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Halfway to the weekend! Budget cuts could spell the end of NASA's Chandra X-ray Observatory. Here's a look back at some of the coolest photos taken by the $2 billion space telescope during its 25 years of service.

In today's big story, we're looking at how Tesla has entered its cost-cutting era.

What's on deck:

• Markets: The Fed and the Middle East conflicts won't slow down stocks, according to some Wall Street vets.

• Tech: A "social walkie-talkie" app is the newest thing tech insiders are excited about.

• Business: People looking for the American Dream are finding it abroad.

But first, we've gone off the track.

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The big story

Tesla trouble

The wheels are coming off one of the most high-profile car makers in the world.

Tesla's awful 2024 got much worse this week when the company cut 10% of its workforce, and a major executive resigned after 18 years at the EV maker.

Fears of layoffs at Tesla had been building along with Wall Street's growing concerns. That all accelerated after the company reported slumping delivery numbers earlier this month.

In the aftermath of the cuts, market watchers wonder what's next for Tesla, writes Business Insider's Graham Rapier.

Tesla reports earnings next week, but we've already got an idea of one of Elon Musk's big ideas: robotaxis. Amid all the bad news over the past week, the Tesla CEO said the long-awaited robotaxis will be unveiled in August.

But as Graham points out, robotaxis aren't a novel concept for Tesla, which has been pitching the idea for years. And rolling them out would mean improvements to Tesla's Full Self-Driving software, which has lagged behind competitors.

In the meantime, Tesla's stock keeps falling.

Shares of the EV maker are down more than 35% this year, giving back a good chunk of the massive gains it saw in 2023. Meanwhile, most of its Magnificent 7 peers have continued their 2023 hot streaks.

Tesla's been good to its longtime investors. It's up more than 900% over the past five years, far outstripping the S&P 500 index (72%). And the stock has bounced back from volatility before. Tesla's incredible 2023 was preceded by a 65% drop in share price during 2022.

But external factors make this year's comeback more daunting.

Demand for EVs in the US is slowing down, and China is proving to be a more prominent rival than Musk previously believed. Even worse, people who are in the market for EVs aren't necessarily interested in Teslas.

Big, expensive EVs aren't what customers want. And that's an issue for a company whose newest vehicle is a big, expensive EV.

Yet, despite a long list of recent setbacks, there is some good news buried amid the carnage: EV sales data shows Tesla has outpaced all competitors in the US electric vehicle market lately, growing its market share to 51.3%.

Meanwhile, Musk is at the center of it all. The polarizing billionaire is embroiled in several feuds, including with Tesla. And now his latest endeavor, an AI startup, is reportedly pulling talent away from the EV maker.

3 things in markets

1. The Andy Sieg era is underway at Citi's wealth business, and it includes some massive changes. The Merrill Lynch vet has only led the unit since September, but almost a dozen executives have left since he arrived. Here's a running list of who's departed so far.

2. There ain't no stopping this bull market. Despite geopolitical concerns and interest rates staying high, some Wall Street vets don't see an end to the bull market. From explaining away the high inflation data to why we're in a buy-the-dip moment, four experts weigh in with their optimistic take.

3. Truth Social users are feeling glum about Trump Media's tanking share price. The ex-president's social media platform has plummeted over 60% since it went public at the end of March. Truth Social has been buzzing about the stock's steep decline, with some "Truthsayers" claiming its shares have been artificially devalued.

3 things in tech

1. Kids are bored with VR goggles. A new survey found 56% of teens who own VR devices rarely use them. That's bad news for companies like Apple and Meta, which are banking on the tech for the future.

2. Silicon Valley's new favorite social-media platform is an invite-only audio app. Airchat, an app marketed as a "social walkie-talkie," is taking off among tech and creator-economy insiders. But can it stick around?

3. Microsoft is gearing up for the AI boom. The tech giant's data center capacity grew rapidly in recent quarters, according to an internal presentation seen by BI. It's planning an even faster ramp-up in capacity over the rest of 2024, the document showed.

3 things in business

1. The new American Dream? Leaving the US. With the cost of living in the States on the rise, more and more Americans are deciding that the only way to get ahead financially, pay off debts, and save for retirement is to move abroad.

2. Australia's retirement model could inspire America's. While US retirement plans rely on workers' contributions to accounts like 401(k)s, Australia's superannuation system mandates employer-funded retirement contributions. Adopting something similar could improve Americans' retirement.

3. New York is using AI to challenge wealthy remote workers. CNBC reported that the state's tax department is sending out hundreds of thousands of AI-generated letters looking for revenue. It's mainly targeting wealthy remote workers and those who require a change in tax residency, per the outlet.

In other news

• Trump is struggling to stay awake at his first criminal trial. It's going to be a long 6 weeks.

• US Navy warships shot down Iranian missiles with a weapon they've never used in combat before.

• I quit McKinsey after 1.5 years. I was making nearly $200k but my mental health was shattered.

• China is still struggling to fix its demand problem — and that's bad news for the likes of Apple and Tesla.

• It's not just you: Reddit is taking over Google.

• Amazon is pouring big bucks into geek culture — and Critical Role's Matt Mercer just dropped a major hint about the series fans have been waiting for.

• Bank of America's dealings with Leon Black and Jeffrey Epstein are in the Senate's crosshairs.

• Citadel's Ken Griffin wants to build a massive NYC skyscraper that the city hopes will lure more workers back to the office.

• Millennials may have an easier time buying homes in these 5 cities where boomers may actually give up their houses.

• I relocated across the country when Tesla asked. Then I was laid off 6 months later.

What's happening today

• Today's earnings: Discover and other companies are reporting.

• Semafor's World Economy Summit starts today.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London.