Investor's Corner
Tesla’s planned layoffs to affect 3% to 3.5% of total workforce: “We grew a little too fast in some areas”
Tesla CEO Elon Musk has set the record straight about the electric vehicle maker’s layoffs. Tesla’s efforts to optimize its workforce have been met with some confusion, partly due to Musk’s own updates about the matter. And with the layoffs now being reported across social media platforms such as LinkedIn, some Tesla employees have taken the legal route to complain about their termination.
Earlier this month, a leaked email from Musk revealed that the CEO was looking to cut off about 10% of the company’s workforce. Musk later clarified this statement, stating that the cuts would be implemented on salaried employees. The headcount for hourly employees would actually be increased. Musk also noted that Tesla would not be terminating employees that are working on key tasks such as vehicle and battery production.
During his virtual appearance at the Qatar Economic Forum on Tuesday, Musk was asked to clarify Tesla’s headcount reduction plans. Musk explained that Tesla actually grew too fast in some areas, so some reduction is pertinent for now. However, considering that salaried workers only comprise about 1/3 of the company’s employees, Musk noted that his 10% job cut estimate would result in just about a 3% to 3.5% reduction in Tesla’s total headcount.
“Tesla is reducing the salaried workforce roughly 10% over the next probably three months or so. We expect to grow our hourly workforce, and I should be quite clear that we expect to grow our hourly workforce. But we grew very fast on the salaried side. And we grew a little too fast in some areas, and so it requires a reduction in the salaried workforce.
“We’re about two-thirds hourly and one-third salary. So I guess technically, a 10% reduction in the salaried workforce is only roughly a 3%, 3.5% reduction in total headcount,” Musk said.
This past weekend, two former Tesla employees filed a lawsuit against the company. According to the plaintiffs’ lawyer, Tesla had violated US labor laws when it initiated “mass layoffs’ in its workforce. As per the Worker Adjustment and Retraining Notification Act, employers are required to provide 60 days of advance notice of a mass layoff or plant closure. This was reportedly not done in Tesla’s case.
Elon Musk, however, seemed to dismiss the lawsuit when asked about the topic at the Qatar Economic Forum. The CEO noted that the lawsuit “has no standing” and is of “minor consequence.” He added that anything Tesla-related typically gets a lot of attention, so even trivial legal efforts against the company are at times blown out of proportion.
“We did make an announcement on that. Let’s not read too much into a pre-emptive lawsuit that has no standing, that is a small lawsuit of minor consequence. Anything related to Tesla gets big headlines, whether it is, you know, a bicycle accident or something much more serious. It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant.
“I would put that lawsuit you’re referring to in the trivial category. So a year from now, I think our headcount will be higher in both salary and obviously in hourly, but in the short term of the next few months, we expect to see, like I said, roughly a 10% reduction in salaried workforce, which is actually just really only a 3%, 3.5% reduction in total headcount and not super material,” Musk explained.
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Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
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