Report: Tesla Cut Delivery Team by Two-Thirds

February 11, 2019 at 12:17 AM

The job cuts Tesla Inc. announced last month have slashed the company’s 230-member U.S. vehicle delivery team by 150 people, according to Reuters.

Two of those workers at the Las Vegas distribution center tell the news service the layoffs suggest Tesla expects new orders for the company’s Model 3 electric sedan will drop sharply this year. They assert that demand is slowing because of rapidly shrinking federal tax breaks available for the cars.

Tesla CEO Elon Musk said in January that the company was reducing its staff by 7%, or 3,200 people, because it must reduce costs to avoid further losses. The company also has said its current focus is to push Model 3 sales in Europe and China.

The company needs high sales volume for the $42,900 car, the cheapest in its all-electric lineup, to establish sustainable profitability. Musk says Tesla is still six months away from being able to offer a base Model 3 at the originally claimed price of $35,000.

The laid-off employees cited by Reuters assert that Tesla has exhausted the list of would-be buyers willing to pay more than $40,000 for the car.