Electric Vehicle makers Tesla Motors Inc. have announced a restructuring strategy in China and plan to cut jobs due to slower than expected sales in the country.
Having missed sales targets, Tesla Motors China have announced a complete restructuring wherein some positions will be done away with while others will be added though overall headcount will be considerably reduced. Despite China being the world’s largest car market, sales were not as expected, leaving the company with no other recourse than to reduce jobs. A leading newspaper estimated that around 30 percent of staff of Tesla Motors China will be reduced which works out to about 180 or its 600 employees in the country.
China had estimated about half a million electric vehicles on the road by the end of 2015 and 10 times that amount by the end of the decade. However, sales during the past year stood at just 50,000 cars of the 20 million vehicles sold falling in this category. The job cuts will affect sales and marketing departments besides public relations, legal and technical support. Some front line sales personnel, after sales personnel and sales consultants will also be among those jobs cut.
The Government of China has extended various subsidies on purchase of electric vehicles and has also relaxed stringent license plate restrictions in a bid to encourage customers to turn to electric vehicles for means of transport. However, reasons for lower than expected sales of electric vehicles could be due to customers viewing these vehicles as expensive to run while lack of infrastructure could also be a major hurdle. In January 2015, Tesla Motors sold only 120 cars while the company is also facing problems with lack of dealers and supercharger stations.