Musk Fires Top Tesla Exec Amid Plunging Tesla Sales in Europe & China

Forbes

Tesla's European new car sales plummeted 27.9% year-on-year in May, partly due to brand damage from CEO Elon Musk's controversial rhetoric. Meanwhile, Chinese manufacturers are rapidly gaining ground, maintaining strong momentum in Europe's evolving EV market.  Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2025/06/26/elon-musk-has-fired-one-of-his-top-tesla-lieutenants/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  0:00 Introduction 1:27 A Big Deal: Staff Shakeup at Tesla 5:26 How Bad Are Tesla's Sales? 8:07 Musk's Firing Habits and a Shrinking Executive Pool  12:40 What's Next? No Replacement in Sight  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now

00:08is Alan Onsman, senior editor and author of The Current Climate Newsletter. Alan,

00:13thanks so much for coming on. Hey, Brittany. Good to be with you today.

00:17Good to be with you. You have news of a staff shakeup at Tesla. Elon Musk has fired his head

00:24of operations in North America and Europe. This is someone who has been with the company since

00:292017. He started off as an engineer. What can you tell us about the news?

00:34Well, it is a big deal because Tesla, relative to other large companies, companies of its size,

00:42runs pretty light. There's not a large group of executives at this company. So removing someone

00:47like this who was in charge of two of the world's three biggest regions for the company is a very

00:53big deal. The guy forced out was named Omid Afshar. He's been with the company, as you said,

01:00since 2017. He's become a real sort of confidant for Musk and has worked very closely with him

01:07for the last few years, reporting to him directly, certainly for the last five or six. He was very

01:13instrumental in construction of the Texas Gigafactory, which was a big deal for the company and is now

01:18also its base of operations. And he did for a time sort of he was sort of eased out a few years ago

01:27out of Tesla over an issue related to purchases of glass that were it was a very confusing kind of

01:32situation. And he spent time at SpaceX. But then he rotated back in to Tesla about a year or so ago

01:38and then was elevated to this position last October, where he was put in charge, as you mentioned,

01:45of North America and Europe. And so that's a big deal because the only other region that he wasn't

01:53looking at would have been China, of course, and Asia. But those are some of the biggest parts of

01:58Tesla's world. And things aren't going that well in either of those markets. In fact, in any market

02:04for Tesla right now, I want to ask just how surprised are you by this news? Because we know

02:10over the weekend, Tesla launched their robo taxis in Austin, and he tweeted about it. He said it was

02:17an absolutely historic day for Tesla. So based on that alone, I mean, that's not really an indication

02:22that you're going to get fired just a few days later. I mean, how shocking is the move?

02:28It is quite surprising. And the timing is unusual. As you say, there are two factors. Number one,

02:33the robo taxi launch on Sunday was a big deal. A lot of attention paid to that. And the second

02:41quarter is about to close. So we're in the last week of June, you know, pushing out the person

02:47overseeing, you know, with a major management role for the company days before the close of the

02:53quarter. Well, the signal to the markets is probably not the best. The expectation is, you know,

02:59sales are going to be down. EV sales are going to be down everywhere. They've certainly been down

03:03consistently in Europe for several months now, but they're down in China. They're down in the United

03:07States. So perhaps what it also is a demonstration of Musk's frustration or disappointment with the

03:18core business and how things are moving there. And the problem is they're moving in the wrong

03:22direction. You pointed this out in your report that Omid Afshar was in 2024, in November of 2024,

03:29the Wall Street Journal called him Musk's fixer. And they said that he was the powerful executive

03:35reshaping Tesla. That was just about seven months ago. So what has happened? What has transpired in

03:40the last seven months for him to go from fixer to out of a job? Well, they've gone the wrong way.

03:48To put it mildly, things have not been fixed. On the product side, you know, we've written and

03:55talked about this, but Cybertruck has been the only new product for Tesla recently.

04:01Sales have not been great for that. They're a fraction of what Musk had anticipated.

04:05And the cupboard is kind of bare on new products. They did a major refresh of the Model Y

04:10this year. And the hope was that will really boost sales for that product. It's Tesla's top seller

04:16around the world. There's little evidence so far that it's made much difference. They have a lot of

04:22unsold inventory. Sales are slowing in every key market. So that's certainly not going well.

04:29The other issue is some of Tesla's problems have nothing to do with Afshar and were not his

04:33responsibility. And these are issues that were created by Elon Musk himself. Since last year,

04:39his very strong support for Donald Trump and association with Trump and the Trump administration

04:44have not been positives for the Tesla brand. His role running Doge for Trump for the first few

04:51months of the Trump administration did not reflect well on Musk or the brand. And we've seen that in

04:58poll after poll consumer surveys. There were protests in April and May at Tesla stores, anti-Musk

05:05protests. You know, in Afshar's role, well, that's not him. I mean, he's not causing those things.

05:13How do you fix that? I have no idea. And well, I do have an idea how you might fix that.

05:19And that might be perhaps he was the wrong person to go.

05:24And you and I have talked about that, that Elon Musk is pretty radioactive and has been for the

05:28brand since he was really after a stint working with President Trump. But there are two other

05:35issues Tesla faces, which you and I have talked about the product issues, whether it be cyber trucks,

05:40dismal sales or there's no new exciting product. As you mentioned, there are other viable competitors

05:46in the EV space. I mean, how responsible was Afshar in those other two issues?

05:52Well, in part, yes. You know, he would have been the person to advocate for perhaps making sure that

06:00they did have some competitive new product in the marketplace. There's been this ongoing issue

06:04with something that was called the Tesla Model 2 that had been talked about for a long time. And

06:10this was going to be a fairly low cost EV, maybe $25,000 to $30,000 price range to start. And

06:18Musk essentially canceled that last year. In retrospect, that certainly does look like a mistake.

06:24When Tesla did its RoboTaxi preview at Universal Studios last year, or Warner Brothers Studios,

06:35rather, excuse me, they showed off this thing called the Tesla Cyber Cab, this two-door kind of small

06:40model. And by all accounts, that was the Model 2. And the curious thing was, when you saw it, it's like,

06:47well, why don't you just get that on the road? There you go. There's a product that would be

06:51affordable, an interesting new thing. And it doesn't have a competitor. There's really no

06:55model in the marketplace currently that would be similar, but they didn't do that. Perhaps

07:00Afshar should have pushed for something like that more aggressively to make sure they had that.

07:06There's no indication that low price Tesla products are on the way. And at the end of the day,

07:13you know, Musk has talked consistently for a year now that Tesla's future is RoboTaxi's,

07:18autonomous vehicles, robots, and AI. The problem is, right now, today, none of those things generate

07:25revenue for Tesla. They can be very exciting new businesses for the future, but they're not

07:29businesses today. So the key thing is, yes, you can pivot to these things at some point,

07:34but you need to keep your core business strong. And what we're seeing in quarter one and now quarter

07:40two is the core business is not looking strong right now.

07:43I mean, talk about just how weak the core business is looking, because you mentioned how interesting

07:48this timing is, because we're just days away from the close of Q2. And Tesla sales aren't doing great

07:54right now, either in America or Europe. Just how bad are they?

07:58They're bad. Europe, they're down double digits this year, five consecutive monthly declines

08:04in 2025 through the month of May. So that's every month this year. The US is likely the same. We don't

08:12have a close look at the US just yet. They were down about 10 percent in Q1 in the United States.

08:18Q2 is likely to be sharper. And that's for several reasons. There's a belief out there, for example,

08:24that federal tax credits are already gone, which is not correct. They still exist. But many consumers

08:29think that Trump already got rid of them. So the overall US EV market has cooled considerably.

08:36And Tesla is the biggest seller of EVs in the United States. It's now under 50 percent market

08:42share. For the longest time, Tesla was 75 or 80 percent of all US EV sales. Now it's below 50 percent

08:49and falling as other companies come to market. But we will see some pretty brutal numbers,

08:55it looks like, in Q2. At a minimum, consensus analysts forecast right now for Q2 EV deliveries

09:02down at least 10 percent. And that would be best case scenario. I've seen a couple analysts who have

09:08much starker numbers where it's more like, you know, 15 percent or so quarterly decline,

09:14which would be astonishing. They just have not seen a fall like that. Tesla, for most of its history,

09:20has been a growth company. It's always been expand, expand, expand. In 2024, we saw the first ever

09:26year over year sales decline. And unfortunately, that looks like it's accelerating. A lot of Tesla

09:34fans and investors think that's OK because they're coming with these other new businesses and they're

09:39going to pivot and those will be limitless potential. And I would say maybe, but they're not businesses

09:46today in the sense that there is no meaningful revenue from robo taxis, AI or humanoid robotics.

09:53So, you know, go after those things, but make sure you don't ignore your current businesses.

10:00And unfortunately, that seems like, you know, they're not doing that right now.

10:04And Elon Musk, from what we know of him, doesn't really seem to be a bleeding heart when it comes

10:08to firing people. He's no stranger to cutting jobs. As we know, he spearheaded the Doge initiative

10:13and he laid off thousands of Twitter employees once he bought the company a couple of years ago.

10:18But does he frequently let people go that are that high up in the company?

10:25Not that often. And by all accounts, this is someone who had been quite close to Musk that had

10:31really sort of done everything to please him. And yet he ended up getting cut. So that may indicate

10:40that, you know, Musk's patience has worn thin, even with some of his most loyal lieutenants.

10:48And it is worrisome. Again, mentioning earlier, Tesla is not really a conventional company relative

10:56to other large scale companies, certainly not no other automaker, where the, you know, C-suite

11:03and the upper executive pool is so thin. There's Elon, there's a CFO, and then there's some vice

11:09presidents. And it's very difficult to know who's in charge of what on any given day.

11:16And unfortunately, that pool seems to be getting smaller. And Omid's departure is not the only big

11:22one that happened in June. The head of Tesla's humanoid robotics department left early in the

11:28month on June 6th. Which is interesting, because that's supposed to be another one of these new

11:34pillar businesses, robots, the Optimist Project. So it's from the outside, I'm not sure any of these

11:41developments generate a lot of confidence that things are going to get better in the near term.

11:46I want to talk about that just a little bit. I want to put my perspective on as an investor,

11:52if I'm an investor here, and I see sales are down on multiple continents, if I see Elon,

11:58Elon oust a top confidant, a top lieutenant at the company, if I know that he thinks that

12:04robotics and AI are the future of this company, and the head of the humanoid robotics department

12:09left earlier this month. I mean, what exactly am I thinking right now? What do these moves mean?

12:16I certainly would be concerned. I think it's fine to be optimistic about the potential

12:21that these new business moves could have for Tesla over time.

12:24But we haven't seen meaningful proof or a timetable about when they're going to turn into

12:31multi-billion or even multi-trillion dollar businesses, as Musk has claimed. The robotaxi

12:37example we talked about the other day is a good one. They were charging a token amount for a tightly

12:42controlled pilot project on Sunday since then. That's fine, but that really looks more like testing.

12:50That does not look like an actual commercial program at this point. So what is its real revenue

12:56potential? Well, that's going to depend on how quickly it scales, how soon it's made available

13:01in other cities. None of those things are clear from what they've demonstrated thus far.

13:06Versus, say, the Waymo example, where they keep adding cities. And Waymo isn't sharing a lot of its

13:12numbers, but we see them steadily going up in terms of 250,000 or 300,000 rides a week,

13:19and how many millions of people they've given rides to thus far. So we have a better sense of

13:23how that business is scaling. Tesla's not there yet with Robotaxi. And humanoid robotics, like,

13:31I couldn't begin to tell you when that's really going to be a meaningful business,

13:35when that'll show up on the balance sheet. I mean, it's going to be a while, I think. So

13:39sure, push those things, develop those things, plan for those businesses. But again, don't neglect

13:46where you're actually making your money today, cars, batteries, and charging services. And those

13:52really are the areas that need the most attention. And so the removal of a key executive who'd been

13:59responsible for those areas in two of the world's three largest regions for Tesla should be of some

14:05concern. So I think certainly investors would want to know, you know, is management, is the board

14:12making the best moves right now in both the near term and long term for Tesla. And I think it's

14:20questionable with some of the things we've seen that certainly there are concerns. You know, last

14:24month, we also looked at pension funds and, you know, concerns coming from the state level where

14:31they're very unhappy with what they see as the lack of fiduciary responsibility by Tesla's board.

14:39They feel that Tesla's board should be leaning on Musk and his team a little harder to make sure

14:45that both the things that people don't like about Tesla go away, but also to stabilize the business

14:51and ensure that it's going to be around for the long term. And I know that you have said that Elon

14:57Musk likes to keep a light C-suite and this news just broke. But is there any murmurings of who his

15:04replacement is going to be? None that I'm aware of so far, no. And it's possible that there were

15:13other removals this week that his, you know, Afshar's removal may not be the only one. I just

15:24don't have hard confirmation of other names at this time. So there may have been some housekeeping.

15:29And if it's a broader move by Musk at this time, well, that certainly could also be a concern

15:36because there was a time when I could tell you the top 12 or 20 executives at Tesla. Honestly,

15:45I can't do that today because that pool keeps getting smaller and smaller and smaller. There's

15:50been a lot of turnover. I can think of three key people in top roles and that's about it.

15:56And that is very different from other major companies that we cover. Tesla is unique in

16:03many ways. Well, Alan, per usual, I appreciate your updates and reporting. Thanks for joining

16:09me. And until next time. Thanks a lot, Brittany. Always great to be with you.

16:13Thanks a lot. Bye.

16:14Bye.

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