🚘 Tesla fired everyone

What’s going on here?

Tesla fired its entire Supercharger division to save its bottom (line), showing no mercy for the rival carmakers that were counting on its expansive charging grid.

What does this mean?

Tesla announced last quarter that revenue had slid by 9% from the same time last year, despite the EV maker rolling out a sequence of price cuts to entice budget-conscious consumers into the showrooms. So now, Tesla’s leaning into cost-cutting instead, shutting down the division that runs the Supercharger charging network as part of a massive belt-tightening effort. But despite firing two senior executives and hundreds of staff, Musk still somehow plans to expand the Supercharger network. Only now, the focus is more on maintaining existing stations than building new ones.

Why should I care?

Zooming out: Back to the drawing board.

Charging stations might sound like a mere accessory, but Tesla has poured billions into this network to make it one of the world’s best and biggest. So investors aren’t just worried about the implications for Tesla. Rivian, Ford, and General Motors all rely on Supercharger’s infrastructure – so if they want to grow their charging networks at speed, they’ll need to make alternate plans. And they’ll be starting from scratch. Tesla didn’t give anyone a heads up, not even investors or the companies that make their money working on those stations up and down the US.

The bigger picture: To EV, or not to EV.

Mercedes, General Motors, and BMW recently launched their own charging venture together, with an aim to reduce carmakers’ reliance on Tesla’s established network. The pullback could be exactly what they need, then. Of course, their work will only pay off if folk keep driving EVs: still-to-be-won-over drivers are already wary of relying on chargers to get them from A to B, and with electric and hybrid cars still costing more than traditional ones, this could be the straw that broke the electric transition’s back.

What’s going on here?

Microsoft shook on a mammoth deal with Brookfield Asset Management to add more renewable energy to the grid, all to support the tech titan’s power-hungry data centers.

What does this mean?

The widespread use and development of AI means that data centers – massive warehouses packed with computing gear – are whirring away like never before, with Microsoft alone opening a new one every three days. Problem is, these data centers suck up a ton of electricity, which is putting a damper on Big Tech’s efforts to flaunt their eco credentials. So to clean up its act a little more, Microsoft has announced a partnership with Brookfield Asset Management that will bring another 10.5 gigawatts of renewable energy to the grids that fuel the firm’s data centers – enough to power nearly two million homes.

Why should I care?

For markets: Utility companies are getting a rebrand.

The International Energy Agency projects that global power demand for data centers will hit over 1,000 terawatt-hours by 2026. For context, that’s the entire annual electricity consumption of Japan. And predictions are only moving in one direction: forecasts for electricity demand growth in the US – home to a third of the world’s data centers – in five years’ time have nearly doubled over the past 12 months. So while utility companies are usually one of the stock market’s more boring corners, they may just offer a savvy way to benefit from the AI boom.

The bigger picture: Tech needs to choose a North Star.

The more energy data centers need, the less likely it is that intermittent renewable power will be able to keep up. So as one of the few energy sources that can deliver reliable, round-the-clock power, natural gas could be around for longer than most folk think. After all, tech firms deciding between making money from AI and saving the world is hardly Sophie’s Choice.