Tesla Layoffs Primarily Affecting Model S And Model X Team Workers

Makes sense - Model S and Model X sales are going to slowly revert to minimal levels and Tesla will obviously no longer invest in that platform. Anyone who wants/wanted one has/had one already.

Honestly, if you drive an $80,000 to $100,000 luxury car, you are not going to care about a $50,000 mass-market small sedan (that looks like a Hyundai by the way).

As of now, Tesla is a "one-line" car company - with the Model 3 alone - with no money/working capital for future model development. Also, the ONE vehicle they sell is in a category that American's don't care about - small/medium 4-door sedans.

Spies - what strategy mistakes has Tesla made that has left them in this challenging spot?

My contribution - the Model 3 should have been a small, traditional crossover - like the X3, Q5, Subaru Crosstrek. Tesla bet on the wrong vehicle segment for their mass-market product IMO.

Now that the Model 3 "novelty sales" are withering, which direction does this go?

Lol. You're kidding, right? Model 3 is the envy of the auto industry. It outsells EVERY suv in its price range. Just imagine what the Model Y will do.

"in its price range" really isn't a valid argument, as the Model 3 isn't selling in its own targeted price range. If one looks at the Model 3s intended price range then the SUVs like the RAV4, CRV, etc. etc. have to be included and some these models on their own outsell the Model 3, never mind the sum total of all the SUVs sold in this segment. Further people aren't cross shopping the Model 3 against them. Some of these Tesla defensive arguments are really apples versus bananas. A real fruit stand.

@vette71

Must hurt twisting yourself into knots like that.

I do not disagree with your comments, but I believe the mistake Elon made was going after mass market. He was doing surprisingly well with overpriced rolling batteries as the newest accessory. he is only making a miniscule profit on the Model 3 at the average transaction price of $58,000. He knew there was no path to making a $35,000 EV. he lied to those who plunked down $1,000 deposits.
He should have gone upmarket with a Range Rover SUV and charges north of $150,000.

e-tron>model x

I'm not Elon and I don't run an auto company. Yet something does not quite jive here. Ever since the model 3 has come out there have been production issues with it. First Tesla cannot build enough of them to satisfy the waiting list. Then they can't seem to infrastructure them to various drop points across the country. The latest of problem issue's have to do with sloppy quality(ie-mis-aligned body panels, poor paint quality etc). Further the promise of an actual 35K model 3 has yet to be filled. So now the latest is Elon is laying off 7% of the workforce-a workforce primarily hired to build model S and X which are the higher end cars. So I'm guessing while the higher end cars are more profitable Tesla simply must not sell enough of them. Enter model 3. This is the bread and butter model. So these workers must have been costing the company some serious money. The money he does not have to pay those previous workers means he builds more model 3's. But then to me this seems even less an incentive to build a 35K car. The profit sweet spot is probably 45K to 60K with options. How are they making money on a 35K car? Battery technology may have come down some but it is still quite expensive. That can certainly eat into potential profits.