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Tesla confirms China job cuts as sales struggle

Tesla is set to cut up to 180 jobs in China, according to local sources.

The electric car manufacturer has since confirmed the cuts but did not specify exact figures, with reports indicating that nearly a third of the company’s 600 Chinese employees could be at risk.

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Company spokesperson Gary Tao told the Wall Street Journal that the job losses were necessary to protect Tesla’s long-term position in the Asian country.

“We’re not just leaving. We’re trying to serve the market," he said. "Some people will go."

Although Tesla expanded its worldwide employee numbers to more than 10,000 last year, it has struggled for sales in China. Despite the Chinese government pushing alternative sources of energy in order to reduce the country’s reliance on imported oil, many customers are concerned regarding the lack of charge points. This has held back sales of electric vehicles, with Tesla believed to have sold less than half of its target figure of 5,000 cars.

Tesla has reiterated that it still believes its Chinese business will be successful, but it appears as though 2015 has not proved any more promising so far. Analysis by JL Warren indicates that 469 Tesla cars were registered in January, more or less on par with the latter part of 2014, suggesting that an upturn in fortunes has not materialised.

The high-end automobile market in China is a potentially lucrative one, which has seen Tesla faced with a number of competitors.

Chinese car manufacturer BYD has claimed that its hybrid Qin vehicle was the most popular new energy car in China last year, with sales in excess of 14,000 units. Competition from BYD, as well as established car firms like BMW, has seen Tesla’s sales figures squeezed.

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Tesla and its CEO Elon Musk will be hoping that the launch of its electric SUV, the Tesla Model X, later this year will help revive the firm’s stuttering Chinese business.

Barclay has been writing about technology for a decade, starting out as a freelancer with IT Pro Portal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.