Date
19 November 2017
Elon Musk says underperforming country managers will be asked to leave or take a demotion. Photo: Reuters
Elon Musk says underperforming country managers will be asked to leave or take a demotion. Photo: Reuters

Tesla chief threatens to sack overseas managers over weak sales

Tesla Motors Inc. founder and chief executive Elon Musk is threatening to fire overseas executives after weak Chinese sales of the company’s luxury electric cars.

Tesla sold about 120 cars in China last month, well below its aggressive targets, Reuters reported Wednesday.

The lackluster sales cast doubt on Musk’s ambitious global expansion plans.

Musk expected China sales could rival those in the United States as early as 2015, the report said citing unnamed sources.

Two top China managers left the company in 2014, Tesla said last year.

Tesla shares slumped 7 percent on Jan. 13 after Musk said China sales were “unexpectedly weak” during the fourth quarter.

“We’ll fix the China issue and be in pretty good shape probably in the middle of the year,” he said at the time.

But in an internal e-mail to managers in late January, he threatened to fire or demote country managers if they are “not on a clear path to positive long-term cash flow”, according to two people who have seen the memo.

Reuters was given a transcript by one of the sources.

Tesla did not have an immediate comment on Tuesday.

Musk plans to boost annual production from a projected 50,000 cars this year to 500,000 by 2020, with the US and China as his two largest markets.

In January, Musk forecast that production would reach “a few million” units a year by 2025.

China sales, meanwhile, continue to lag expectations, triggering an executive shuffle.

In mid-December, the company confirmed the departure of China manager Veronica Wu. Her predecessor, Kingston Chang, left Tesla in March.

Musk in the internal email said underperforming company managers “will be asked to leave or assume a more junior role. This has already happened in China and will likely happen in some other countries, too.”

Tesla began taking orders in China in mid-2013 for its sole product, the Model S sedan.

In January 2014 it said the Chinese version of the car would be priced from US$121,000, including duties and shipping costs.

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CG/RA

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