Tesla Motors Inc (TSLA) Cuts Jobs In China

In the face of falling oil prices, Tesla Motors Inc (NASDAQ:TSLA) has reportedly been considering slashing of jobs in China. The local papers indicate that the company might cut 180 – 600 jobs in its China facility. Though the company confirmed that it was slashing jobs, it did not give any indication of the number of planned job cuts.

Though Tesla Motors Inc (NASDAQ:TSLA) has not disclosed anything about the drop in oil prices as the reason for the job cuts, the general impression is that the demand for electric cars could come down if the oil price keeps falling. Electric cars were preferred to bring down the costs spent on oil.

Small Cuts

The company’s spokesperson, Gary Tao, has reportedly said that it was not leaving, but was trying to serve the market. As a result, some job cuts would be there. However, the job cuts would be small in number, only on a worldwide scale.

The slashing of jobs comes on the heels of Tesla Motors Inc (NASDAQ:TSLA) nearly doubling its staff strength in 2014 to over 10,000. It was believed that China could be a big potential market for the electric car, in view of the problems with pollution and the consumers’ appetite for luxury cars.

Poor Sales

The company’s sales in China seemed to be poor in 2014. The company’s CEO, Elon Musk, had set a target of 5,000 cars to be sold in China last year to consider the launch as a success. However, based on JL Warren Capital’s data, it recorded less than 2,500 car sales after it launched in April last year.

Tesla Motors Inc (NASDAQ:TSLA) appears to be facing challenges in charge stations getting installed. The majority of the urban population lives in low-rise housing, complicating the installation of charging stations at home. The company’s CEO attributed the weakness in sales to the absence of charging support. The company also witnessed some of its executives leaving its China operations. Its revival of fortunes in China hinges on the electric SUV launch this summer.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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