Latest in Gear

Image credit: Patrick T. Fallon/Bloomberg via Getty Images

Tesla allegedly 'gutted' Model 3 delivery team with recent job cuts

It might have run low on key Model 3 reservation holders.
279 Shares
Share
Tweet
Share
Save

Sponsored Links

Patrick T. Fallon/Bloomberg via Getty Images

When Tesla laid off 7 percent of its full-time staff in January, it might have dealt a serious blow to one division in particular. Reuters sources claim Tesla dismissed 150 of the 230 Las Vegas workers involved in delivering Model 3 units to North America buyers. Reportedly, the cuts are a response to tapering demand -- there are "not enough deliveries" to justify having that many people on hand, one tipster said. There are other delivery people in other locations, but this would still represent a significant cut.

The cuts were supposedly prompted by Tesla's quest to sell as many Model 3s as possible during 2018, which included immediate deliveries and warnings about expiring tax credits. The EV maker was "plucked clean" of North American reservation holders willing to pay existing prices for the Model 3, which still costs over $42,000 before incentives -- well above the originally promised $35,000 base price. Tesla has argued that it needs to improve economies of scale to hit that price point and hopes to reach the target in mid-2019, but that could still leave numerous people without a car for months.

Tesla has declined to comment. It might not have too much reason to panic if the rumor proves true, though. The company has managed two profitable quarters in a row on the back of both Model 3 sales and earlier layoffs, and its goal remains to turn a profit every quarter in 2019. It's unclear how many of its current sales revolve around reservations or the Las Vegas facility, for that matter. The job cuts may be a sign of trouble, but it's unclear if that trouble would be serious or just a brief blip.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
279 Shares
Share
Tweet
Share
Save

Popular on Engadget

Nintendo says there is no Switch exchange program

Nintendo says there is no Switch exchange program

View
IKEA creates a business unit devoted to smart home tech

IKEA creates a business unit devoted to smart home tech

View
US will reportedly give Huawei another temporary reprieve

US will reportedly give Huawei another temporary reprieve

View
Beto O'Rourke wants to hold internet companies liable for hate speech

Beto O'Rourke wants to hold internet companies liable for hate speech

View
The next Apple Watch may come in titanium and ceramic models

The next Apple Watch may come in titanium and ceramic models

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr