Exclusive Reuters: When Tesla Inc announced last month a second round of job cuts to rein in costs, one crucial department was particularly badly hit. The automaker more than halved the division that delivers its electric vehicles to North American customers, 2 of the laid-off workers said.
Some 150 employees out of a team of about 230 were let go in January at the Las Vegas facility that gets tens of thousands of M3’s into the hands of US and Canadian buyers, they said, in a sign the company expected the pace of deliveries to significantly slow near term.
The cuts, which have not been previously reported, could fuel investor worries that demand for the M3 in the United States has tailed off after a large tax break for consumers expired last year and the car remains too expensive for most consumers.
Tesla has said its focus this Quarter is on supplying cars to customers waiting in China and Europe.
“There are not enough deliveries,” 1 of the former employees told Reuters. “You do not need a team because there are not that many cars coming through.”
Delivery of the M3 was the company’s Key priority in 2-H of Y 2018, as Tesla tried to supply all buyers wanting the full benefit of the $7,500 US tax credit before it was cut in half at year’s end.
The M3 is Key to Tesla’s plans for long-term profitability. The company aims to post a profit in each Quarter this year, based on the expectation that it will sell more M3’s and continue to cut costs.
Tesla declined to comment on the job reductions in the delivery team. The company still has an undisclosed number of delivery personnel attached to other locations.
Even before the paring back of the delivery team, investors questioned the level of demand for the M3 remaining after Tesla’s all-out push to supply buyers ahead of the tax credit cut.
“Given the need for revenue to cover costs and generate cash, the financial community should be focused on the level of demand for Tesla vehicles in particular the Model 3,” wrote Barclays automotive analyst in January.
The 2 former delivery workers said the Y 2018 sales push has left Tesla’s reservations list plucked clean of North American buyers willing to pay current prices of over $40,000 to get their hands on a M3.
CEO Elon Musk said in Y 2016 the car would start at $35,000 sparking a rush of reservations, but Tesla has yet to actually sell any cars at that price, despite 2 price cuts already this year.
Forbes reported late Thursday CEO Elon Musk has put his Bel Aire, California mansion up for sale.
Heffx-LTN’s overall technical analysis is Bearish across the board.