Tesla Motors Inc confirmed on Monday it will reduce its workforce in China as the electric carmaker continues with its restructuring efforts to combat sluggish sales.
Gary Tao, a spokesman for the Palo Alto, California-based company said that Tesla will part ways with an undisclosed amount of employees in order to create a “stronger and more efficient team.” Mr. Tao declined to comment on a report issued by the Chinese newspaper Economic Observer, which said that Tesla is set to reduce its employee count by 180 out of the 600 in total based in China.
Led by millionaire Elon Musk, Tesla started to offer its all-electric vehicles in the worlds largest market in April, but failed to meet its optimistic sales target for year.
The carmaker operates nine stores and service centers in six cities and put up a relatively good performance given the countrys low number of electric charging stations.However, the results were well below Mr. Musks projections, who described sales in China as “unexpectedly week”.
In order to spur demand for its products Tesla launched a new initiative this year, under which employees are set to install a free charging station at every new customers home before the purchased vehicle is delivered.
Mr. Tao also said that although the overall number of China employees will be reduced, Tesla will add some new employees in order to better position itself in the market. The previously announced restructuring plan began in January and is nearly completed, Mr. Tao said.
Despite the challenges that Tesla faces in China, it remains confident in the markets growth potential. The company continues to believe that high pollution levels in the country will drive more customers to choose eco-friendly means of transportation and that the company will eliminate fears over charging difficulties.
Unlike its home market, where most people live in houses and have plenty of room to install and operate charging stations, the majority of Chinas population inhabit apartments, which reflect in additional problems for Tesla and its home-installment program.
In December the head of Teslas Chinese operations left the company after only one year with company and was replaced by Tom Zhu, who is in charge of reviving sales in the region.
Tesla lost 3.36% on Friday and closed at $193.88 on the NASDAQ, marking a one-year decrease of 21.25%. The company is valued at $24.38 billion. On Monday the stock edged up 0.52% during after-hours trading.
According to the Financial Times, the 17 analysts offering 12-month price targets for Tesla have a median target of 280.00, with a high estimate of 400.00 and a low estimate of 65.00. The median estimate represents a 44.42% increase from the last closing price.
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