Electric vehicle manufacturer Lucid is having a very bad week.
The nation’s leading electric vehicle manufacturer Tesla (TSLA) – Get Free Report has had a rough first quarter of 2023 as far as recalls go.
Earlier in March, the National Highway Traffic Safety Administration opened an investigation into 100,000 Tesla 2023 Model Y SUVs over an issue with steering wheels coming off while driving. The Model Y is one of Tesla’s bestsellers.
The Austin, Texas-based EV maker followed that with a recall of 2,649 Tesla Model S vehicles in China that were manufactured in the company’s Fremont, Calif., plant. The Model S recall was issued for EVs purchased in China that were produced between Oct. 14, 2015 and Aug. 23, 2020. The Model S currently is only produced in Fremont. The Model S safety recall was issued due to a problem with the front trunk, or frunk, latch lock that could cause the front lid to pop open while driving, posing a safety risk.
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Tesla in February issued a safety recall of 362,758 of certain Model S, Model X, Model 3 and Model Y vehicles for an over-the-air software update of its Full Self-Driving feature. The NHTSA considers this a recall, but Tesla CEO Elon Musk considers the use of the word “recall” a case of semantics believing that using the word recall for an over-the-air software update is “anachronistic and just flat wrong!” according to one of Musk’s tweets.
Tesla Has Layoffs
Tesla had some additional bad news in the first quarter as it on Feb. 15 laid off 4% of its workforce in its Buffalo, N.Y., Autopilot labeling team, which amounted to over 30 employees. Controversy always seems to surround anything involving Tesla CEO Elon Musk, and this was no different. Workers United Upstate New York union filed a complaint with the National Labor Relations Board asserting that Tesla was retaliating against its employees for union activity, Reuters reported.
Days before the layoffs, Buffalo Tesla workers said they planned to join the Workers United union, but Tesla claimed it had decided on its layoffs on Feb. 3, 10 days before the company became aware of the union organizing activities.
In June 2022, Musk called for a Tesla hiring freeze and a layoff of 10% of its employees, which the company expected to implement in the first quarter of 2023, Electrek reported. But the company has not laid off 10% of its employees yet in the first quarter as of this writing. The only layoffs were the Buffalo employees in February.
Lucid Also Has a Recall and Layoffs
Tesla rival Lucid is also having a bad first quarter of 2023, as it issued a recall of 637 Lucid Air EVs as a mechanical defect could cause a power loss and shut down the vehicle’s electric motor, according to a March 23 NHTSA Safety Recall Report. Lucid had investigated the power loss issue since May 2022. Vehicle owners will be notified of the recall on April 21, according to the safety recall notice.
Lucid employees faced really bad news on March 28, as the EV maker’s CEO Peter Rawlinson sent a message to the company’s workers, totaling 7,200 at the end of 2022, that Lucid would lay off 18% of its workforce, or almost 1,300 employees.
“Earlier today, I announced the difficult decision to reduce our workforce at Lucid. Given evolving business needs and productivity improvements, we are reducing the size of our organization by approximately 18%, which will affect Lucid employees and contractors. This action is aligned with the cost discipline announcement we made in late February when we reported earnings. We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time,” Rawlinson said in the opening of his message.
Lucid will provide impacted employees with a severance package that includes access to career resources, company-paid healthcare benefits and accelerated equity to help employees in their transition, the message said.