Want China Times, Staff Reporter 2015-03-07
US electric car innovator Tesla Motors is in the process of cutting 30% of its staff in China, reports the Beijing-based China Times.
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| Customers visit a Tesla showroom in Beijing on July 9, 2014. (Photo/CFP) |
US electric car innovator Tesla Motors is in the process of cutting 30% of its staff in China, reports the Beijing-based China Times.
According
to an anonymous company insider, at least 30% of Tesla's 600 staff in China
will be culled across the board, including nearly half the staff in the sales
department. The decision came directly from US headquarters, the insider said.
"In
addition to the technical support and procurement departments, the marketing,
public relations, legal, administrative and sales departments will also be
downsized," said the insider, adding that the process began before the
Chinese New Year break last month.
When
contacted by China Times, Tesla did not deny the claims outright but responded
that the information was "not accurate."
The
expected downsizing comes as Tesla China business director Sam Shen confirmed
his resignation to reporters on March 3. Shen is one of several high-profile
executives to leave the company in the last year. Last month, Tesla Greater
China chief marketing officer June Jin stepped down for unspecified reasons. In
December, Tesla China president Veronica Wu also resigned, just nine months
after she replaced her predecessor, Kingston Chang, the original spokesperson
for Tesla's China division.
One of the
major problems facing Tesla in China has been high inventory levels. Available
numbers reveal that Tesla imported 4,800 vehicles in 2014, but only 2,499 of
those vehicles were registered for road use by the end of the year. Sources
said while there may be some buyers who have not yet registered their vehicles,
this number is likely to be very low.
A
significant portion of the inventory is said to have come from cancellations of
pre-orders, in particular the Model S P85D. Last October, Tesla announced that
it had managed to upgrade the model's acceleration speed so that it took only
3.1 seconds instead of 4 seconds to hit 100 kilometers per hour, but that it
was also increasing the price by 120,000 yuan (US$19,150). As a result, many
customers reportedly canceled their pre-orders, preferring to forgo the 15,000
yuan (US$2,395) first-stage deposit than go through with the purchase.
The poor
results mean that Tesla did not even reach a third of its Chinese market sales
target of 10,000, which had been upgraded from 3,000 and 5,000 earlier in the
year. Tesla founder Elon Musk even admitted during the North American
International Auto Show in Detroit in January that the company's performance in
China has been "unexpectedly weak."
Company
insiders say that downsizing in China is inevitable given that Tesla's
operations on the mainland grew from less than 20 people to nearly 600 people
in just two years. The rapid expansion has not been in line with market
developments, one insider said.
While most
automobile manufacturers see China as a major untapped market, Tesla's
performance in the region has so far been largely unsuccessful. In 2014, Tesla
manufactured a total of 35,000 vehicles and sold 31,700 units globally. North
America account for the bulk of the purchases with 55%, with Europe making up
another 30%, meaning the Asian market contributed only 15%.
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