Shanghai, May 9, 2024 – US automaker Tesla is cutting jobs in China in response to declining sales. According to sources familiar with the matter, the latest cuts have affected multiple departments at the Shanghai factory, including customer service, technicians, production line workers, and the logistics team.
These layoffs are part of a broader cost-cutting effort at Tesla that is being driven by a global slowdown in demand for electric vehicles. The company announced in April that it plans to reduce its global workforce by more than 10%.
The situation is particularly acute in China, as Tesla faces increasing competition from domestic rivals such as BYD. Sales at the Shanghai factory fell 18% in April, while the overall market for new energy vehicles in China grew 33%. As a result, Tesla’s share of the Chinese market has fallen from 10.5% in Q1 2023 to 7.5% in Q1 2024.
The layoffs come despite Tesla recently achieving two major milestones in China. The company gained approval from regulators to deploy its most autonomous version of its Autopilot software, and it struck a deal for mapping and navigation with Chinese tech giant Baidu.
It is unclear how many people will be laid off as part of the latest wave of cuts in China. Tesla has not yet responded to requests for comment.
Summary:
- Tesla is cutting jobs in China in response to declining sales.
- The layoffs have affected multiple departments at the Shanghai factory.
- The company is facing increasing competition from domestic rivals in China.
- Tesla’s share of the Chinese market has fallen in the past year.
- The layoffs come despite recent milestones in China.
Sources: TASR, Bloomberg https://www.bloomberg.com/news/articles/2023-07-07/tesla-starts-to-layoff-some-battery-workers-at-its-china-factory
