Tesla Inc. is planning to reduce its global headcount by more than 10%, amid reported plans to make and sell cars in India.
Tesla has been ramping up production at two plants—Austin and Berlin—amid Musk’s plans to visit India and set up a production facility in the world’s third-largest automotive market.
The billionaire is likely to meet Prime Minister Narendra Modi on April 20-22, and announce his plans to make and sell Tesla cars in India.
According to reports, Tesla is scouting for a location in India to set up its manufacturing facility.
It is also said to be eyeing a partnership with Reliance Industries Ltd. for manufacturing operations and real estate for retail operations.
Tesla Inc. is planning to reduce its global headcount by more than 10%, amid reported plans to make and sell cars in India. In an internal email, Chief Executive Officer Elon Musk cited “duplication of roles and job functions in certain areas” as the reason for the job cuts, Electrek reported . Assuming the cuts apply companywide, the dismissal would amount to more than 14,000 employees.
The report comes against the backdrop of Tesla’s first quarterly sales decline in four years.
The maker of the Model 3 electric sedan shipped 3,87,000 units in January-March, missing revised Bloomberg expectations of just under 4,50,000 units. A year ago, Bloomberg analysts had expected Tesla to ship 5,30,000 units during the quarter. Now, several analysts are bracing for Tesla’s sales to potentially shrink for the year, citing slow output of its newest model—the Cybertruck— and a lull in new products.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk wrote in the email. “As part of this effort, we’ve done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done.”
Tesla hadn't responded to emailed queries at the time of publishing this story.
Tesla has been ramping up production at two plants—Austin and Berlin—amid Musk’s plans to visit India and set up a production facility in the world’s third-largest automotive market. The billionaire is likely to meet Prime Minister Narendra Modi on April 20-22, and announce his plans to make and sell Tesla cars in India.
That was made possible by the government’s revision of India’s EV policy.
Global electric carmakers, which invest at least $500 million to set up local manufacturing operations, will enjoy a reduced customs duty of 15% on imports for five years, as against 70-100% at present. The minimum CIF (cost, insurance and freight) of the electric car must not exceed $35,000. There is no upper limit on the investment, but the facility has to go onstream in three years and achieve 50% localisation in five years.
India’s new EV policy is a big win for Tesla, which had been lobbying with New Delhi for a favourable tax regime to sell in India. The Narendra Modi administration wasn’t keen until the company committed to local manufacturing.
According to reports, Tesla is scouting for a location in India to set up its manufacturing facility. Gujarat, Maharashtra and Tamil Nadu—states with automotive hubs and access to ports—are said to be in the shortlist.
Tesla has reportedly signed an agreement with Tata Electronics Pvt. to manufacture critical components. It is also said to be eyeing a partnership with Reliance Industries Ltd. for manufacturing operations and real estate for retail operations.
