Seeking cost reductions amid a highly competitive, and slowing, electric vehicle market, Tesla CEO Elon Musk announced the company has plans in place to lay off about 10% of its current workforce or about 14,000 employees.

The news, first reported by EV news outlet Electrek, came in a Monday memo from Musk to Tesla employees in which he cited the need to find savings and achieve his goal of making Tesla more “lean, innovative and hungry for the next growth phase cycle.”

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk wrote in an email obtained by Electrek.

While overall electric vehicle sales in the U.S. are continuing to grow, the rate of that growth has “slowed notably,” according to a report from Cox Automotive.

Tesla remains the dominant player in EV sales but is seeing its share of new vehicle sales slipping in a market with a growing number of manufacturers and vehicle options.

Tesla recalls nearly every one of its vehicles on U.S. roads

Cox reports that while the 268,909 electric vehicles sold in the U.S. in the first quarter of this year represent a 2.3% volume increase over the same time last year, sales were down over 15% from the last quarter of 2023. And while Tesla sales dipped, some other brands saw significant increases in EV sales to start the year.

“Electric vehicle sales in the U.S. declined during Q1 2024 — the first quarter-over-quarter downturn since Q2 2020,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, in a report published last week.

“As anticipated, Tesla’s sales took a hit, influencing the overall market dynamics. However, a few brands saw significant EV sales increases, achieving over 50% year-over-year growth.”

Valdez Streaty said in spite of the slower rate, she expects the U.S. EV market to continue to expand.

“As noted in January, we are calling 2024, ‘the Year of More’,” Valdez Streaty said. “More new products, more incentives, more inventory, more leasing and more infrastructure will drive EV sales higher this year. Even so, we’ll continue to see ups and downs as the industry moves towards electrification.”

Tesla sales dropped 13% in the first quarter of 2024 compared to the same time last year, according to The New York Times, and the EV giant’s overall market share slipped from 62% to 51%.

While Tesla sales slipped in the first three months of 2024, Cox Automotive reports nine manufacturers recorded more than 50% year-over-year growth in EV sales in the same time period, including BMW, Cadillac, Ford, Hyundai, Kia, Lexus, Mercedes, Rivian and Vinfast.

Cox predicts EV’s footprint of 7.3% of all new vehicle sales in the U.S. will grow to 10% by the end of the year.