Hey guys, it's sasha, elon musk has apparently just said that he has a super bad feeling about the economy. That is a quote, and he just ordered tesla to immediately stop hiring people around the world and then go one step further. According to reuters, who have broken this new story, elon musk is going to cut 10 percent of tesla's roughly 100 000 employees, and this is pretty bad in more ways than just the obvious. I am going to share with you exactly what elon musk said.

What this new story is all about and why this could be really quite bad for tesla, stock and tesla shareholders. So this morning reuters published a news article that has sent tesla stock tumbling down after having a good few days. Tesla is now down about four percent. In pre-market trading so far as i'm recording, this video reuters have apparently seen another yet another email from elon musk to his senior executives.

That said that he has a super bad feeling about the economy and needs to cut about 10 jobs. Now, before i get into all the details, it is somewhat curious as to how and why all of these emails are suddenly being leaked from tesla. It is not like that there are that many different executives working at tesla and we have had two emails leaked yesterday. Another one today so either there is a bad apple within the ranks who is intentionally leaking all this confidential information because they have a bone to pick with elon, musk or elon.

Musk is intentionally feeding this information to the media through one of the execs indirectly, because he wants everyone to know what his and tesla's position on these types of things are. He wants everyone to know what he's doing if elon musk did not want these leaks to happen or wanted to find out who it was that did it. I presume it wouldn't be too difficult to create. I don't know a unique number of tiny little variants of the same email with very minor differences in punctuation or maybe different time stamps on when it was sent out or something like that to find the culprit unless, of course, elon musk is very happy with these Leaks happening in the first place, i don't know which one it is, but it's an interesting question right anyway, i will link the article from writers in the description, although almost all of it is just filler content and isn't very useful or interesting.

But according to this, article, reuters have seen an email from elon musk two years executives. Although there is extremely little in the way of evidence, they don't print that email, not the whole email, not even parts of it, and the only details that reuters have published are the title, which apparently says pause all hiring worldwide and then a bit about him. Thinking that the economy is about to go south and him wanting to get rid of 10 of all staff, that is it now. There are a few critical things that you need to know here for background.

Tesla shanghai was closed for a large chunk of q2 and production was limited for another month until the reopening that is happening right now. So there is a very real risk. The tesla's q2 numbers are going to fall short of expectations, potentially very short, and naturally elon musk may be looking for some kind of tactical moves ahead of those q2 results that will be coming out at the end of july, so we have about a month and A bit to go also tesla has just opened the two new huge factories in austin and berlin, and they are only just now ramping those factories still very early stages. Now, according to reports over the last few weeks, they are still only just somewhere in the early to mid stages of the hiring process to ramp production in both of those factories.

I just went on tesla's careers website and there are 4 153 different jobs currently available in the united states. I'm also presuming that many of these jobs are looking for more than one person, so there's a huge number of roles - probably 10 000 up that are still available on the website. Just in the us alone. There's another 772 jobs available in germany, most of them at the new gigafactory site in brandenburg near berlin.

But then it's only been minutes since this report came out. So i'm not sure if they're going to stay on there, if they're going to remove them, put them back, because elon musk has apparently only just given that instruction. But the issue here is this: if this report is true, it will mean that austin berlin factories will pause, hiring because hiring is being paused worldwide and the ramps in those two factories will stall as a result, without getting the new factory workers on board training them Up and going into multiple rotating shifts production in texas and germany is going to be slow for tesla. We already know that it's going to be slow in q2, but this indicates that it may be much softer in terms of numbers in q3 and q4 as well than it may otherwise have been, and the natural question is: are we getting the full story here? Are we getting the actual reasons sure? Maybe a bad recession is on the way, and maybe that will affect tesla sales, but in q1 earnings tesla reported absolutely mind-numbing levels of demand.

Their average global vehicle inventory was just three days of supply. The lowest they've ever had as they've been making more cars demand seems to have been going up even faster. Even now, if i go into the tesla website and try to order a model 3 in the united states, the estimated delivery is august to december for the base and long-range models. So we've still got a queue of several months.

To wait in the uk expected delivery. Is january 2023 to march 2023, i'm guessing the uk right-hand drive models are still coming out of shanghai, that is a six to nine month, wait and in germany it's exactly the same timelines, also six to nine months. So one of two things must be true in this case: either. Elon musk thinks that we have an absolute monster, the mother of all recessions heading our way that is going to last a while, and the demand for tesla cars is going to collapse because in that case, you're, probably thinking well a bunch of the orders.

We already have are going to get cancelled, tesla will probably not get a bunch of new orders as a big recession hits money becomes tied, less people want to be spending large amounts of money on a luxury cars, and if this is the case, then we do Have a big problem for tesla stock because the popular thesis that tesla's demand is almost limitless, that they can go to producing 10 million 20 million 100 million. However many people, however many cars people think tesla, is going to be producing. That theory is showing that maybe it's going to have some cracks. If this is correct, suddenly those kind of theories fall apart and the valuation of the company would take a huge beating.

If that were the case, because at the end of the day, cars that cost 50 to 60 000 are quite expensive for the average buyer. And although they are really nice, that potentially could really suffer if we did hit a really big recession. Now, if you just build two new huge biggest ever factories and an economic slowdown means that you don't even want to hire staff for those factories. Why would you then want to build even more factories if the ones that you've just built are not even running at any kind of pace and you're, not even trying to ramp them and remember? This is all before the additional phases have been built in berlin, texas and shanghai, and there is an alternative explanation as well, though elon doesn't really think that a giant recession is on the way that will wipe out tesla's demand.

So perhaps something else is going on and he is using this battering ram this reason to get rid of dead weights from the company. This, maybe could be true. Some people are saying that it is true. This theory sort of goes with the recent tweets, also from elon, where he said that working from home is now over.

All staff are expected to come into the office for at least 40 hours a week. It sounds like something has happened recently, maybe where elon got really frustrated with maybe many employees, maybe very specific employees, not pulling the weight. I found it particularly interesting that in the original email to his execs, he wrote. Moreover, the office must be a main tesla office.

Not a remote branch office unrelated to job duties, for example, being responsible for fremont factory human relations, but having your office be in another state. Now this sounds extremely specific. I don't know who that person is who is or was in charge of hr and fremont, but i'm guessing that person really pissed elon off and most likely just got fired now. It is a natural way of things for large companies that scale fast to need to cut off dead weight every now, and then this is pretty normal and common.

It just seems a very odd time to freeze all hiring worldwide and start doing the firing when you've just opened up those two huge factories that you have not yet filled with any staff in the first place. So, although it kind of makes sense, i think it adds a lot more question marks than it answers and the earlier tweet from elon musk now makes a lot more sense. Tesla have delayed their ai day by a month and a half to september 30th, and everyone celebrated this fact, because elon said this is because tesla may have an optimist, prototype working by then now, in my opinion, which is not grounded on anything really. It's just my personal opinion.

It sounds incredibly ambitious to go from a person dressed in spandex, doing a funny dance to a fully working industry-breaking robot prototype in just a few months. If it happens great because i am an investor in tesla and that's going to be good news, i just have my my question marks around exactly what that is actually going to look like, but according to tesla and elon musk ai days actually are not there to Announce new products: they are not there to go and talk about your technology to try to push the stock or anything like that. They are there to attract the best talent to tesla. That is what they say.

They are essentially huge hiring events, so it kind of makes a lot of sense that you would go and postpone a hiring event if you were to suspend all hiring all together and are in the process of firing 10 000 employees instead. The problem here, though, is that, if this is how the story joins up, it means that tesla is planning to cut hiring by at least a few months, because that event was due to happen in mid-august. And so, if tesla is taking a say, three-month pause and hiring, because that will take us up to that end of september new deadline, that is at least a quarter's worth of delay in the ramp in the new factories at least, and we haven't heard anything at All about the ramp of the 4680 cells, nothing really has been leaking on that front. I am guessing.

If it was going particularly well would probably have some kind of an update, some kind of new some kind of tweet, or something like that, and then remember that tesla have recently announced that it will actually be manufacturing cars with 2170 cells in austin. After all, so perhaps there is some kind of production or scaling or both types of issues there and maybe tesla needs more time to accelerate the battery production before they can start fully ramping those factories, because, presumably you don't want to invest time in building a 2170 Base production line and then go and completely switch a giant chunk of that production line over to 4680 cells. Immediately after now, i don't know i'm just taking a wild stab in the dark here. The thing is, reuters are generally quite good at ensuring that their articles are based on some kind of robust sources, at least compared to some other publications.

So i'm guessing that the email that they see say that they have seen is probably legit and unfortunately, if that is the case, then, regardless of which scenario i just went through is playing out. It is not going to be good news for tesla shareholders. Something is going on and it's probably going to mean that tesla stock is in for a rough patch for the next few months ahead. If you found this video useful, please don't forget to smash the like button for the youtube algorithm.

Thank you so much for watching. I really appreciate it and, as always i'll see you guys later, you.