Tesla to cut more than 3,000 jobs because cars 'still too expensive'

Tesla is bringing an early end to its popular customer referral program. Image Shutterstock

"The California-based company had a torrid 2018 as it struggled through production problems with its mass market" Model 3 auto and had to pay out $40m over tweets Musk made about taking the firm into private ownership. Though results for Q4 aren't quite settled yet, he says that "preliminary, unaudited results indicate that we again made a GAAP profit, be less than Q3".

"Right now, our most affordable offering is the midrange (264 mile) Model 3 with premium sound and interior at $44k", Musk added. The company was stuck in "production hell", as Musk dubbed it, as Tesla raced to produce 5,000 Model 3 sedans - it's most affordable vehicle - per week, a goal it ultimately reached. "We grew by 30 percent past year, which is more than we can support", he said. Musk touted the results as a "historic quarter" but stressed in a letter to investors that sufficient profitability of the Model 3 was "critical to make our business sustainable". In June, Tesla dismissed 9 percent of its workforce, after misjudging how quickly it could ramp up mass-manufacture of the Model 3 - only to go on an aggressive hiring spree shortly after.

Tesla reported a profit of $311.5 million, or $1.75 per share, for the third quarter ended September 30.

In addition, Tesla said it needs to continue making progress toward a lower-priced Model 3.

Tesla shares walked off a cliff on Friday after the company announced layoffs. "There isn't any other way". He noted that its vehicles will get even more expensive when the USA tax credit on EVs is halved on July 1 and eliminated at the end of 2019. He warned in May that Tesla would "lose money & die" if it shipped a $35,000 version of the sedan right away.

"I want to be clear", Musk said during a "60 Minutes" interview on Sunday on CBS.

The latest reorganization news was buried in an email in which Musk discussed the "voraciously competitive" industry where Tesla is working to stay afloat.

Shares in the auto manufacturer opened more than 6 percent lower as trading began in the United States on Friday.

A Tesla spokesperson said the move was part of a phased recall under a schedule previously set by the US National Highway Traffic Safety Administration.

"The road ahead is very hard", Musk wrote in his letter. Musk admitted as much in this blog post - one doesn't even have to read between the lines.

Currently, the only Tesla EVs available in Australia are the Model S and Model X which come with a minimum price tag of $A168,305 for the 100kW dual motor Model S sedan, or $A172,685 for the similarly spec'd Model X SUV.

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