Tesla claims 'no choice' in wielding axe on 3000 jobs

News					Tesla Semi gets closer to production amid test drive event for reservation holder

News Tesla Semi gets closer to production amid test drive event for reservation holder

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

Tesla CEO Elon Musk announced the cuts, which will comprise about 7 percent of the electric vehicle maker's workforce, Friday in a company blog post that was sent to employees. "There isn't any other way".

Tesla will cut its full-time employees by around 7 percent, CEO Elon Musk said Friday.

Currently, the most affordable Model 3 you can buy costs $44,000-significantly above the target price of $35,000 Musk announced in 2016. Musk pointed out, though, that the third quarter's profit was partly the result of a strong push to sell higher-priced variants of the vehicle - the Long Range Model 3 AWD and the Model 3 Performance - to customers in North America. Musk says this makes the need for lower-priced Model 3s "even greater". In the fourth quarter, Tesla built about 4,700 Model 3s per week-and that's of course including a new line assembled a year ago in a tent in the factory parking lot.

Federal plug-in vehicle tax credits for Tesla buyers have also begin to wind down after Tesla sold its 200,000th auto last July.

To offset the loss of that tax incentive, Tesla this month cut the price on each of its three models by $2,000. As of this writing, TSLA shares were trading at $302.68, down 12.85%.

Shares in the vehicle manufacturer opened more than 6 percent lower as trading began in the United States on Friday.

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Tesla, it seems, is not out of the woods yet, despite selling nearly 100,000 electric cars previous year.

However, while it ramped up production of its mid market Model 3 auto, it said its products were too expensive for most people and its profits too low.

In a note to investors on Friday, Wedbush analyst Daniel Ives said that Tesla is "entering a fork in the road situation that will ultimately define the future of the company for years to come".

Tesla cars imported from the USA are now subject to a 15 per cent tariff on the mainland. The company was stuck in "production hell", as Musk dubbed it, as Tesla raced to produce 5,000 Model 3 sedans - it's most affordable auto - per week, a goal it ultimately reached.

Even as Tesla struggles to produce a more mainstream vehicle, many industry analysts still see the company as the one to beat, even with the world's biggest automakers now fully engaged in the pursuit of an electric auto.

"The net effect is that Tesla must work much harder than other manufacturers to survive while building affordable, sustainable products".

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