Business
The EV market is in trouble: The latest sign is Tesla's layoffs
Tesla is in trouble: Its product line is aging. Sales are stalling. Top executives are fleeing. The stock price is down. The first wave of new Cybertrucks is riddled with quality problems. The low-cost Model 2 recently promised by Chief Executive Elon Musk appears to be dead.
Some of Tesla’s most environmentally conscious buyers are signaling their disgust with the behavior of Musk by turning to other brands, even as price cut follows price cut. Those bargain basement deals are squeezing profit margins, though the company remains profitable and still sells more EVs than other automakers.
The company’s four auto factories have more car-making capacity than the company has customers.
The situation is so serious that on Monday, Musk announced that “more than 10%” of its global workforce would be laid off. How much more Musk did not say. Tesla did not respond to a request for comment for this article, but Musk said in an internal email explaining the layoffs that the company had to seek cost reductions and higher productivity.
If Tesla were the only electric car maker under pressure, that alone would send shivers through California policymakers, from Gov. Gavin Newsom on down, who in their quest to address climate change and air pollution have set strict mandates that will ban sales of new cars that run only on fossil fuels by 2035.
But the drive to electric vehicles has, at best, hit a rough patch, with little visibility into road conditions ahead. EV sales are still rising but at a far slower pace than the highs reached in 2022 and early 2023.
Ford, General Motors and other major automakers are pulling back on their EV ambitions, putting more of their money behind hybrid vehicles, cutting back on production, and delaying introduction of some EV models. EV startups including Rivian, Lucid and Polestar are laying off workers, as they encounter production problems or fall short of sales targets or both. The financial difficulties at Fisker, the Manhattan Beach electric vehicle startup, became so severe, its stock price so battered, that it’ll get kicked off the New York Stock Exchange on April 22, or, more formally, be “delisted.”
The big question is whether current conditions will prove to be growing pains (however agonizing) on the way to a cleaner transportation economy. And if so, how long the pain will last.
Right now EV sales growth is slowing at a time when rapid expansion is needed to reach climate goals. Across the U.S., EV sale rose only 2.6% year over year for the first quarter of 2024, while EV market share against gasoline cars declined, to 7.3%, from 2023’s 7.6% record high, according to Kelley Blue Book.
Even EV-happy California is bumping into customer resistance: In 2023, EV market share for new car sales topped 21%, far higher than any other state. While 2024 first-quarter California EV sales figures won’t be available until early May, the signs are worrisome: In the last half of 2023, new EV sales declined in California, the first negative growth ever reported.
“We’ve reached a threshold of market intolerance,” said Karl Brauer, auto industry analyst at iSeeCars.com. “The numbers of people who have a personal interest in, or a tolerance for, dealing with EV challenges, or have the means and lifestyle to work with an electric vehicle” appears to be hitting a wall, he said.
Temporary, or long term? Yet to be determined, he said.
His firm looked at EV penetration rates in states and cities and found that sales grew rapidly until market share hit about 8%, and then slowed dramatically or went nearly flat. California is an exception; new EV market share reached over 21% in 2023. Still, in the year’s last quarter, EV sales growth went negative, with Tesla new car sales down 10%.
The current problem for EV advocates: how to move the customer profile from early adopters to mainstream buyers.
More than 90% of EV buyers, Brauer’s research shows, are relatively affluent homeowners who have installed their own chargers and own two vehicles or more — meaning, in most cases, there’s a gasoline car available for long trips.
The majority of car buyers aren’t as well off, so the price difference between gasoline cars and electric cars — about $45,000 on average for gas, compared with about $55,000 for electric — is a big issue. (Even that $45,000 is high for millions of buyers, hence the strength of the used car market.)
EV drivers who live in condos or apartments must rely for the most part on public or workplace chargers.
The public charging infrastructure is notoriously unreliable, outside of Tesla’s charging network, a system the company could afford to build and maintain by maintaining a stratospheric stock price — a stock price that’s suffered mightily over the last year, down nearly 40% in the last six months.
Tesla is beginning to open up its charging network to other carmakers, in part to qualify for federal subsidies.
While EV sales growth is slowing, hybrid cars are blasting off, benefiting companies such as Toyota and Honda.
The Tesla news is reverberating through the auto world. For more than a decade, it was the EV industry. Regulators pointed to Tesla as evidence that customers would buy electric cars if the industry would craft desirable vehicles instead of the glorified golf carts they were producing, weak tea attempts at meeting government regulations. Under pressure from California and 12 other allied states, from regulators in Europe, and a burgeoning EV industry in China, automakers globally are now investing hundreds of billions in electric vehicles.
If California and the world are going to meet their lofty climate goals, policymakers and automakers, including Tesla, have a lot of work still to do.
Business
Five Guys to close two L.A.-area locations
Five Guys will close two Los Angeles-area locations later this month.
The burger chain announced in a recent state filing that its locations in City of Industry and Whittier will close in late May. An outlet in Merced will also close its doors in late June, and one in Hanford will shut down in early July, according to state court filings.
The burger giant is the latest fast-food chain to shutter locations as the industry struggles with rising labor and real estate costs in the state.
The company cited “financial hardship” as a reason for the closures, according to a filing.
Employers are legally required to submit a Worker Adjustment and Retraining Notification, or WARN notice, to alert employers, state and local officials at least 60 days before major layoffs. The initial notices were submitted in late April and early May.
The chain had steady growth in 2024, but seems to have stumbled in California. It opened 37 new storefronts that year, according to the company’s franchise disclosure document. Yet California stores accounted for eight of the 14 locations that closed that year.
The closures will result in 55 jobs lost across the four locations, according to the WARN notice.
A spokesperson for Five Guys did not immediately respond to a request for comment.
Fast food chains have struggled against rising operational costs and increasingly cost-conscious customers.
California’s economic landscape has further complicated business in the state. While aerospace and defense companies have continued to flock to the state, companies in other sectors, including food, have started to bail out.
Five Guys ranked 42 in QSR Magazine’s top 50 U.S. restaurants list for 2026 and the number of locations in the country rose by 2% in 2025.
The chain got its start around 40 years ago in Virginia and now operates over 1,900 locations, according to its website.
The restaurant’s website lists over 85 locations in California, including at least 15 storefronts in the Los Angeles area.
Business
Jury rejects Elon Musk’s lawsuit, sides with OpenAI in bitter feud over AI future
A federal jury sided with OpenAI and its top executives on Monday in a feud with Elon Musk, who accused them of betraying a shared vision for it to guide artificial intelligence’s development as a nonprofit.
The nine-person jury unanimously found that Musk waited too long to file his lawsuit and missed the deadline for the statute of limitations.
Musk, the world’s richest man, was a co-founder of OpenAI, the company that launched in 2015 and went on to create ChatGPT. After investing $38 million in its first years, Musk accused OpenAI CEO Sam Altman and his top deputy of shifting into a moneymaking mode behind his back.
The jury served in an advisory role, but Judge Yvonne Gonzalez Rogers accepted the verdict Monday as the court’s own and dismissed Musk’s claims.
The trial that began on April 27 in Oakland shed light on the bitter falling-out between the two Silicon Valley titans and the origins of OpenAI, now a company valued at $852 billion and poised to become one of the largest initial public offerings in history.
The high-profile high-stakes showdown between two of the most powerful companies and leaders in technology was billed as a battle that could change the trajectory of AI.
There were two weeks of testimony from the dueling entrepreneurs and other key players in OpenAI’s history, providing a rare inside glimpse into the company, which evolved from a startup to one of the world’s most influential companies.
Musk had fallen out with his fellow co-founders, then, after OpenAI became arguably the most important company in AI, he decided he was not happy with how the trailblazer was managed after he left.
Musk claimed Altman, the startup’s chief executive officer, and OpenAI President Greg Brockman “stole a charity” by exploiting his early support for an altruistic research project so that they could later get rich by turning into a regular for-profit company.
OpenAI and its leaders said Musk was suing them to gain a competitive advantage for his own startup, xAI.
Musk was seeking more than $100 billion in damages — to be awarded to OpenAI’s nonprofit arm instead of to himself — as well as the removal of Altman and Brockman.
The case was seen as an existential threat to OpenAI. If the decision had gone the other way, it would have sparked a shakeup that would have destabilized the company just as it is working to ensure the U.S. takes the lead in AI and prepares for a public offering with a valuation approaching $1 trillion.
Associated Press and Bloomberg contributed to this article.
Business
Why this Hollywood director thinks AI can save L.A. film jobs
In 1926, director Cecil B. DeMille hired hundreds of workers to build a set of Jerusalem inside the DeMille Studios in Culver City for the classic silent film “The King of Kings.”
A century later, Jon Erwin filmed his biblical epic ‘The Old Stories: Moses,’ starring Ben Kingsley, on the same studio lot now owned by Amazon MGM Studios.
Except now, much of the architecture, desert location, and supernatural parts of the three-episode miniseries were generated through artificial intelligence. The prequel to ‘The House of David’ series debuts on Amazon Prime on Thursday.
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A production that traditionally would have taken months to shoot and require multiple locations was filmed entirely in one week with a crew of just 100 people — who never left Los Angeles.
“We did this massive sword-and-sandal epic, and we never left a soundstage, very similar to how James Cameron does Avatar or how Jon Favreau does ‘The Mandalorian,’” said Erwin, the director of the series. “When you preserve the performance and the work of the crews and the department heads, then you can do things that are incredibly cost-effective for studios.”
As Hollywood grapples with rapid technological change, a growing number of filmmakers and companies in Southern California are using AI tools to radically rethink how films and TV shows are made.
“Some are still resisting, but many are recognizing that, for better or worse, AI is here and not going anywhere and it is important to reimagine what film creation can look like in light of the new possibilities AI creates,” said Victoria Schwartz, director of the entertainment, media, and sports law program at Pepperdine Caruso School of Law.
A screen of LED panels called “the Volume” is used to film scenes for director Jon Erwin’s series “The Old Stories: Moses.”
(Genaro Molina / Los Angeles Times)
Erwin is among the first working directors at a major streaming platform to fully integrate AI into a commercial production.
Last month, he launched Innovative Dream, a Manhattan Beach production services company backed by Amazon. The company will rent its virtual production facilities to other studios and develop training programs for emerging filmmakers.
Although much of Hollywood is bracing for AI to hollow out jobs, Erwin argues the opposite: that AI, applied ethically around human performances, can return at least some production jobs that have been outsourced even as other positions are eliminated.
“I think the greater threat of job loss in our industry is actually just how expensive things have gotten and how long they take to make,” Erwin said. “If you can make things quicker, and you can make things at a price point that studios will say ‘yes,’ you can employ more people in aggregate and create jobs.”
Although computer graphics have been essential to Hollywood since the 1990s, they traditionally required hundreds of artists and months of post-production work to place actors or crowds in digital worlds. Much of the labor-intensive visual effects work known as rotoscoping was outsourced to shops in India and other countries with much lower labor costs than in California.
By 2019, productions such as Disney’s “The Mandalorian” series advanced this further by using massive LED screens to project images of photorealistic digital worlds — “Star Wars” ships, forests, or deserts — as actors’ performed in costume in front of them. A virtual art department spent months designing the digital environments, and then loading them onto the large screen on the day of the shoot.
AI takes the process a step further.
Through “Moses,” Erwin is championing what he calls “hybrid” filmmaking: a workflow that marries live-action with AI-enhanced workflows in virtual production. The process combines what used to be separate phases — filming with actors and visual effects — to occur almost simultaneously. Scenes shot on set is made available to multiple editors and AI artists within minutes on the production floor, as they show near-finished sequences back to the cast and director.
“You can create assets in three or four days, not 10 weeks. And that means you can actually kind of generate the environment while you’re shooting,” he said.
Erwin, 43, grew up in Alabama and built his career around faith-based films such as ‘I Still Believe’ and ‘Jesus Revolution.’ He had spent years trying to tell biblical stories at the scale portrayed in the source material.
When he pitched “House of David,” a drama about the life of King David, studio executives were initially skeptical. “I was told to just come up with a smaller idea,” he said.
To portray Goliath’s origin story, actors were filmed on green screens and AI was used to generate a mythical sequence involving dark sky, rain, mountains and angels with wings.
It marked one of the first integrations of generative AI in a major commercial production. The series, which premiered last year was viewed by 44 million viewers worldwide and reached No. 1 on Prime Video in the U.S.
By Season 2, the team used 30 different tools, both traditional and AI, to generate images, sounds and video. They pivoted from shooting solely on location in Greece to filming some parts in L. A. in front of an LED wall.
AI was used to generate battle scenes and expand the background crowd size to thousands of people in a fraction of the time traditional CGI required. The use of AI-generated scenes jumped from 70 in Season 1 to 400 shots in the second season.
Jeff Thomas, a generative AI filmmaker who directed two episodes of Season 2, said each episode was made for less than $5 million, defying studio consensus that the show required a “Game of Thrones”-level budget of $12 million to $15 million per episode. Erwin declined to disclose the budgets for the “House of David” series or the “Moses” prequel..
“The Bible describes that battle as there was 100,000 people on each side. Well, it’s never been portrayed like that because we’ve never had the resources,” Erwin said. “We’re finally able to show that scope and scale.”
Erwin conceived of the idea of “Moses” over Christmas, wrote the script in January and created a four-minute trailer entirely created by AI. Amazon greenlighted the series later that month.
Kingsley had a short window before his next commitment, so Erwin prepared and shot all three episodes on a soundstage in a week — a project that would have previously taken six months to prepare.
For the pivotal Red Sea scene, Erwin generated the water volumes and tidal waves in less than hour using AI models from Chinese company Kling AI and Palo Alto-based Luma AI, which would have taken weeks in the traditional process. They wrote text prompts that explored 18 different variations of the sea parting and discarded the ones that didn’t work, enabling Kingsley to react to a tidal wave projected onto a 360-degree LED wall screen.
“‘Moses’ really represented a whole new method of filmmaking for me,” Erwin said.
For “The Old Stories: Moses,” director Jon Erwin used AI for wide shots, stunt-heavy battle sequences and to generate large crowds to showcase the grand scope of biblical stories. The red line he said he wouldn’t cross is using it in place of actors.
(Genaro Molina / Los Angeles Times)
For crucial scenes portraying the palace hallway in Egypt, where Moses talks to the Pharaoh, they built cardboard boxes as the columns in the palace, and “reskinned” them with intricate carvings using AI. Although the set could accommodate only 20 extras, they used AI to create hundreds of background actors.
Erwin also used generative AI to synthetically expand partially built sets featuring sand and rocks and to “de-age” Kingsely to appear as a young Moses.
But some things were off limits for AI, including Kingsley’s performance.
“I just think our faces are so intricate and the micro expressions are so intricate, so that’s always real,” he said.
Instead, AI was used to co-design the character: Erwin originally imagined a bald Moses, but based on Kingsley’s feedback, they fine-tuned the look with weathered hair and mustache.
“The line in the sand for me is replacing an actor,” Erwin said. “I don’t want to be in the industry if I can’t work with actors.”
Jon Erwin’s “hybrid” production involves generating a variety of environments such as forests, deserts, or battle sequences using AI, and projecting them on the LED screen.
(Genaro Molina / Los Angeles Times)
When asked about the background extras displaced by AI crowd generation, Erwin said that’s the wrong way to think about it.
“It’s not a comparison of what would “Moses” have cost otherwise. It’s a comparison of “Moses” would have never been made otherwise, and that’s the way you have to think about it,” he said.
Overall contraction in Hollywood has led to fewer films being shot on location in Los Angeles, and a 30% drop in entertainment industry jobs since its 2022 peak.
“I think you can do those things three to five times faster, at less than 30% the cost,” he said. “I actually see this tool set as an antidote to the job loss problem in our industry.”
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