Tesla had about 45,000 workers in 2018, so the 7 per cent cut works out to about 3,150 jobs lost.

The company will also see a significant increase in competition for electric cars as traditional manufacturers have started to roll out an array of products that will be measured against its pioneering lineup. Shortly after Daimler’s EQC electric crossover, Audi last year unveiled the E-Tron. Its parent, Volkswagen, plans to introduce more than 50 purely battery-powered vehicles through 2025 across the group.

Tesla shares dropped to $US321 in early US trading. The stock is little changed in the past year – though it gyrated dramatically during 2018 as Musk careened from crisis to crisis: warring with analysts over Tesla’s cash needs; smoking weed in an interview and losing his chairman’s role in an SEC settlement over his tweeted buyout offer that never materialised, all while working furiously to ramp up production of the Model 3.

Tesla’s overarching challenge is making cars, batteries and solar products cost-competitive with fossil fuels, Musk said Friday in the blog post.

“While we have made great progress, our products are still too expensive for most people,”Musk said. “Sorry for all these numbers, but I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult.”

Incumbent carmakers are also struggling with the high cost of making electric cars. On top of record investment in new electric-car lineups, high battery costs are crimping margins and buyers worried about charging and driving range largely remain on the fence.

Tesla’s layoffs mark the second shedding of workers in a matter of months. In June, Tesla dismissed 9 per cent of its workforce, after misjudging how quickly it could ramp up mass-manufacture of the Model 3 – only to go on an aggressive hiring spree shortly after.

Bloomberg

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