Elon Musk says Tesla will spend 'well over' $500 million on new EV chargers

By Tomi Kilgore

Announcement comes after reports that Tesla laid off about 500 employees as the Supercharger unit was shuttered

Shares of Tesla Inc. were headed for another drop Friday, after Chief Executive Elon Musk seemed to again dispute recent reports that the company's Supercharger EV charging business unit was being shuttered.

In a post on Musk's social-media platform X, formerly known as Twitter, he said Tesla (TSLA) would create "thousands" of new EV chargers by spending "well over $500 million" to expand its Supercharger network.

The post comes after reports surfaced less than two weeks ago that Tesla had laid off about 500 employees as the Supercharger business was closed.

Following the reports of Supercharger layoffs, Musk posted on X that Tesla still planned to grow the Supercharger network, "just at a slower pace for new locations" and to focus more on expanding existing locations.

Tesla's stock has been up as much 0.6% soon after the opening bell, and was up more than 1% in the premarket, before reversing course to be down 2% in morning trading.

The stock has now slumped 8.8% amid a four-session losing streak, amid growing concerns about the negative impact the recent layoffs would have on the company's staff and business.

The stock was also being affected by a Bloomberg report that the Biden administration planned to implement new tariffs on electric vehicles from China. The Wall Street Journal followed with a report saying the tariff on EV imports from China could quadruple, to 100% from the current tariff of 25%.

Don't miss: China EV makers under pressure after reports Biden aiming tariffs at the sector.

Tesla generated $4.59 billion in revenue from China during the first quarter, or 21.6% of total revenue of $21.30 billion.

These reports come as the EV sector, and Tesla's stock, seem to be close to an inflection point, as competition has been increasing at a time when demand has been slowing.

Tesla's stock has tumbled 32.2% this year, as the company shed roughly $254 billion in market value, according to FactSet data. But since closing on April 22 at a 15-month low of $142.05, the stock has run up 18.7%, as investors cheered the company's first-quarter earnings report even after profit and revenue missed expectations.

Also read: Opinion: Elon Musk gives Wall Street what it wants, but more pain could be around the corner.

-Tomi Kilgore

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05-10-24 1126ET

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