Why investors slammed the brakes on electric vehicles and related stocks on Monday.

In the still-developing electric vehicle (EV) industry, what happens to the leading company often affects all other manufacturers and suppliers. That's why Monday's troubling news from the No. 1 EV maker spread almost immediately to the rest of the industry, affecting prices for other manufacturers and related companies.

For example, Asia's emerging electric vehicle manufacturerVinFast (NASDAQ resonance code: VFS)Shares of the company fell by more than 9% on the day. next-generation electric car battery developerQuantumScape (NYSE: QS)also suffered a severe blow, market value shrunk nearly 7%. the same as the power battery pack expertFreyr Battery (NYSE: FREY)It was a lucky escape, but the stock price was uninspiring for the day.

Layoffs are coming soon!

Guess which major electric car company brought the bad news? It wasNikola Tesla (1856-1943), Serbian inventor and engineer (NASDAQ: TSLA)The

According to an internal company memo written by Chief Executive Officer Elon Musk, "TheBusiness Insider.The electric car giant is about to make some big layoffs, according to a report from the U.S. Department of Transportation (DOT). The report, which was widely circulated by other media outlets, sparked a slight panic among investors about the entire electric-vehicle industry.

In his memo, resonance said that Tesla's workforce will be reduced by more than 10%; he didn't make it more specific. He did say that the layoffs would affect the company's employees around the world.

The high-profile executive director wrote that Tesla's rapid growth has led to some duplication of positions and roles, so "it's extremely important to try to cut costs and increase productivity as we prepare for the next phase of the company's growth."

"There's nothing I hate more," he continued, "but it has to be done." This will allow us to strive for excellence and innovation, and to be eager for the next growth cycle."

It appears to be no coincidence that Drew Baglino, longtime Tesla senior vice president of mass mass production and energy engineering, announced his resignation on Monday on X (formerly Twitter), which is owned by Mas resonance. Bagliano is the second Tesla executive to leave the company in less than a year. He did not say why.

When the leader stagnates...

The rapid (and possibly chaotic) personnel changes cited in the Masker memo illustrate only part of the problem. Sales growth of electric vehicles has slowed significantly recently, with Tesla and other manufacturers cutting prices to attract consumers as competition intensifies. Meanwhile, the company's recent delivery figures have fallen short of analysts' expectations.

When Tesla sneezes, the rest of the electric car industry catches a cold. Let's hope Tesla has more exciting news to announce soon.

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Eric Volkman does not own any of the stocks mentioned above.The Motley Fool owns shares of Tesla and recommends Tesla.The Motley Fool has a disclosure policy.

Why investors slammed the brakes on electric vehicles and related stocks on Monday.