A new report says that Tesla Motors (NASDAQ: TSLA) will cut jobs in China.
The highly touted technology company that produces one of the world’s most popular electric cars is about to lose 180 employees in the Middle Kingdom. Tesla currently has 600 employees in China, where the stated number of jobs to be cut is a rather high 30% of the employee numbers posted in China overall.
According to various sources, Tesla Motors aims to restructure and tighten its position in that particular market with this move. The goal is to provide a boost in sales. But overall, the market will be the deciding factor in China for the American company. Tesla Motors makes nice sales in its respective niche overall. We can say that Tesla is the leader when it comes to electric car sales, but this may come to an end in the future years as well. Globally, they saw some other heavier competitors like BMW (ETR: BMW), Cadillac (NYSE: GM) and others joining in the fight for electric vehicle supremacy. This is naturally providing the car maker with plenty to worry in the forthcoming months as well.
Earlier this year, Tesla China has already seen turnover in its leadership. First, its President Veronica Wu left in December, while its vice president of communications, June Jin, resigned last month. This would be worry some for some bigger companies, let alone a rather small one (by comparison to other big car makers). Tesla Motors is in a rather difficult day in age with sales numbers growing slow on certain markets, specially China as one of the biggest sources of income for several larger car manufacturers.
China is a difficult country for Tesla (and other car makers) overall. The local car production companies are subsidized by the government, there is no clear charging infrastructure set in place, and overall, the cars Tesla Motors imports to China cost more. This is all due to local import taxes, added and set to protect the domestic car industry.
One of the solutions would be to produce the car on site or in the country itself, providing Tesla Motors with the same leveled playing field as the other Chinese manufacturers. While the future seems bleak for Tesla in China for now, there is light at the end of the tunnel for the car maker over there. The overall effort the Chinese government is inputting in making the country pollution free and depending less on gasoline consumption and import, might well be the beacon of light for the car maker going forward in the future.
