Tesla Faces Critical Juncture Amid Supply Chain Overhaul and Declining Sales

Tesla's leadership has issued a sobering internal warning as the electric vehicle manufacturer navigates what company executives describe as its most challenging period to date. The vice president of artificial intelligence has alerted staff that the company is entering what could be the toughest phase in its corporate history, raising questions about whether the former stock market darling is approaching a significant turning point.

The company's sales performance tells a concerning story across multiple continents. In the United Kingdom, Tesla managed to sell just 511 vehicles during October, marking the weakest monthly performance of the entire year and representing a significant drop from the 971 units sold during the same period last year. Year-to-date figures show British sales have declined by 4.5 percent.

The situation appears even more dramatic in Asian markets:

• Chinese sales plummeted by 9.9 percent during October
• Manufacturing output at the Shanghai facility contracted by 32.3 percent compared to September levels
• Market share in China dwindled to a modest 3.2 percent

Supply Chain Transformation Accelerates

In a strategic shift with profound implications, Tesla has instructed all suppliers to eliminate Chinese-manufactured components from vehicles destined for the American market. The company has established an ambitious timeline for this transition, allowing just two years for complete implementation.

Should investors sell immediately? Or is it worth buying Tesla?

This decisive move comes against the backdrop of ongoing trade tensions between the United States and China. Tesla has quietly been working to expand its North American sourcing capabilities for the past two years, but now appears to be accelerating these efforts substantially to mitigate potential tariff risks.

Internal Challenges and Strategic Pivots

The strained circumstances are reflected in Tesla's executive ranks. Beyond the artificial intelligence chief's gloomy assessment, several high-level managers have recently departed the organization, including the head of the prestigious Cybertruck program.

Meanwhile, Tesla is pursuing ambitious future initiatives including the humanoid "Optimus" robot and "Robotaxi" service. To stimulate demand, the company has resorted to unconventional approaches. The Model Y now features a zero-down-payment leasing option in the United States, representing a first for the automaker.

Perhaps more notably, Tesla appears to be reversing its longstanding position on vehicle software integration. After years of firm opposition from CEO Elon Musk, the company now seems to be planning the incorporation of Apple CarPlay functionality—a significant policy shift that underscores the challenging environment the electric vehicle pioneer currently faces.