Too many cars, too few buyers.
Photograph by Wang Zhao — AFP/Getty Images
By Reuters and Fortune Editors
March 9, 2015

High-end electric vehicle maker Tesla Motors Inc (TSLA) said Monday it is cutting jobs in China under a restructuring plan launched earlier this year, after missing a sales target in the world’s biggest car market.

Tesla declined to specify how many jobs would be cut, and did not comment on a report in the Economic Observer newspaper last week that it was eliminating 30% of its staff or about 180 of its 600 employees in China.

Some positions are being eliminated while others are added, but overall headcount has gone down in a restructuring drive that was announced earlier this year, Tesla spokesman Gary Tao said. The staffing changes are already nearly complete, he said.

“The first strategy is to build up a strong and efficient team to respond more quickly to the market, so this is part of the effort to implement that strategy,” Tao said.

China sales have underperformed aggressive targets set by the company, and Chief Executive Elon Musk is prepared to fire overseas executives if they fail to turn around operations in the country, Reuters reported last month, citing sources with knowledge of the matter.

Tesla’s move follows a year in which it has struggled to make an impact in China, a market which needs electric vehicles like no other on the planet to reduce its problems with choking pollution.

China’s authorities have taken a broad approach to encouraging the growth of electric vehicles, something likely to favor Tesla’s rivals, which already have a manufacturing base in the country. Tesla has balked at taking a local partner despite saying it wants to make its cars in the country in future.

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