One of the world’s most famous electric car manufacturers, Tesla, is preparing to axe over 3000 jobs. According to Elon Musk, the company’s enigmatic billionaire owner, Tesla can no longer afford to keep these staff members on its payroll. The reason for the job cuts? The cars are just too expensive.
Most employees of Tesla are based in the US at the main factory in California as well as at smaller facilities based in Nevada, Buffalo, China and the Netherlands. Whilst 3000 certainly sounds like a lot of people, it only actually represents about 7% of Tesla’s entire 45,000-strong workforce.
The founder wrote an email to all staff announcing the decision last week. In this email Musk explained that despite excellent growth, the challenges for the firm have been seriously felt this year. Notably, this amounts to the sheer cost of electric Tesla cars, which despite their many benefits and excellent innovation are not in the financial reach of most people, resulting in slower sales than hoped. Even with sales in 2018 that outstripped all previous years put together, it still wasn’t enough to secure the jobs of these 3000 staff. The share price dropped by around 6% in the morning following the announcement. Along with the job cuts, the company plans on expanding production of its Model 3 car, the most affordable in the range and one they hope to release lower-cost variants of. Making cars that are affordable to the average driver is what the company needs to achieve in order to become sustainable.
Electric cars are still not the norm but are increasingly being seen on UK roads. And this will almost certainly increase in the next few years. It’s even possible to rent electric cars from major car rental companies now. For those who own a car rental firm or car sales firm and are thinking about adding electric cars to the fleet, make sure you have included this information in your fleet insurance. Motor trade insurance from specialist providers at https://www.quotemetoday.co.uk/motor-trade-insurance/ can be tailored to include cover for any electric vehicles in your fleet.
For those 3000 staff this announcement no doubt came as a shock, and for Elon Musk it’s certainly something he was hoping to avoid.