Tesla will be cutting about seven percent of its full-time workforce as it continues to increases production of the Model 3, said the company’s CEO Elon Musk on January 18th in an email to employees.
This comes after the announcement that the Model 3 needs to be sold across more markets in an effort to attract more customers.
“The net effect is that Tesla must work much harder than other manufacturers to survive while building affordable, sustainable products,” said Elon Musk in an email to Tesla employees.
“Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range 354km (roughly 220 miles), standard interior Model 3 at $35k and still be a viable company.”
Elon Musk also said that more focus is needed on to the lower priced variants of the sedan, with the most affordable option so far being USD $44,000 (roughly CAD $58,000).
Following the release of this news, Tesla dropped nearly seven percent in premarket shares, according to CNBC.
“This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit,” said Musk.
This isn’t the only news regarding Tesla trying to get the Model 3 to a more affordable price range. Earlier this week Elon Musk confirmed that Tesla’s referral program will soon end.
This is the second time since June that Tesla has laid off a portion of its staff. During the summer nine percent of the company’s workforce lost their jobs, and Tesla cited trying to cut costs and eliminate duplicated positions.