Tesla to cut jobs as cars 'too expensive'

Tesla to cut jobs as cars 'too expensive'

To say that Tesla has been unprofitable for the majority of its existence may be truthful, but it isn't exactly fair.

Construction of the plant began just three months after Tesla secured a land parcel at Shanghai's free zone.

Currently, the only Tesla EVs available in Australia are the Model S and Model X which come with a minimum price tag of $A168,305 for the 100kW dual motor Model S sedan, or $A172,685 for the similarly spec'd Model X SUV.

In light of that, the pressure for Tesla to turn an even greater profit has been on the rise.

The entire letter, as sent to Tesla employees, can be read in the Press Release section below.

Tesla's cuts comes a week after SpaceX, Musk's rocket company, announced it was laying off 10 percent of its employees.

In the same letter, Musk said he expects the company to eke out a smaller profit in Q4 than it did in Q3.

However, Tesla is not alone in this type of recall.

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As we all experienced first-hand, previous year was the most challenging in Tesla's history.

The carmaker also sold "nearly as many cars" as in all the previous years combined, and the Model 3 climbed to the top of sales charts in the premium segment of the USA market.

Tesla, essentially, finds itself in something of a tough place at the moment, as it needs to cut costs while at the same time ramping up production.

"While we have made great progress, our products are still too expensive for most people", he said.

The key for Tesla is producing an entry-level vehicle in the mid-$30,000 range, which would put it in direct competition with major automakers.

Tesla posted a profit in the third quarter of a year ago - a notable achievement for Musk. That will give Tesla another temporary profit boost in Q1 2019 as it sells high-priced Model 3s to affluent customers in Europe and Asia.

Tesla's shares tumbled earlier this month after it cut vehicle prices by $2,000 and announced fourth-quarter sales figures that fell short of Wall Street estimates. Musk stressed the same deadline in the memo, telling employees Tesla would need to deliver a midrange Model 3 in all markets starting in May. He warned in May that Tesla would "lose money & die" if it shipped a $35,000 version of the sedan right away. The credit fell to $3,750 on January 1, and it will fall again to $1,875 on July 1, before disappearing altogether at year's end. The CEO made sure to explain that there was "no other way".

"It has always been hard to make affordable electric cars, that's why all car-buyers and tax-payers have to subsidize them through taxes and government incentives", Brian Moody, Autotrader's executive editor, wrote in an email to ABC News.

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