Tesla to fire about 3,500 employees to cut production costs

Daniel Fowler
January 23, 2019

It's a critical step that signals the EV maker's best-selling model can now be sold in the European Union, and will bring considerable competition to European brands such as BMW and Volkswagen that currently dominate the local EV market.

The Dutch vehicle authority RDW has added Model 3 to the type of vehicles it has authorized for sale, with which Tesla cleared the final hurdle to start delivering the model to the European market, Bloomberg reports.

The announcement comes days after chief executive Elon Musk issued a letter to all of his employees, describing 2018 as "the most challenging in Tesla's history".

Tesla recently announced that it's cutting its workforce by 7 percent (equal to over 3,000 jobs) in order to turn a profit on the upcoming lower-priced versions of the Model 3.

The company is cutting jobs so it can profitably deliver lower-priced versions of the Model 3, Tesla's first auto targeted for the mass market. Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k.

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"We have been forgiving of Tesla because they've been on the forefront of electric cars, but they need to get their act together before they lose people like us", the depositor said last week. "Moreover, we need to continue making progress towards lower priced variants of Model 3", Musk wrote in the email.

Elon Musk confirmed via Twitter six months ago that left-hand drive Tesla Model 3s would be available in Europe from the "first-half" of 2019.

In addition to reducing its head count, Tesla will also increase production of the Model 3 and make "manufacturing design improvements" to the vehicle.

Lentz said Tesla has created a new segment of so-called technology-driven products.

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