Tesla CEO Elon Musk sent an email to employees on Thursday explaining the company's decision to reduce their number of employees in their sales and marketing divisions, according to a copy of the note sent to CNBC.
News about upcoming layoffs came as Tesla announced that the sale of $ 35,000 model 3 was finally available, adding that all sales of Tesla vehicles would move exclusively on the web. As part of the announcement, Musk also warned that the company would not win in the first quarter, and sent Tesla's share price down more than 3 percent on Thursday night.
Last month, in my email, I noted that the basic problem Tesla must overcome is that our products remain too expensive for most. We know there are many who want to buy model 3, but just can't afford to do so.
Therefore, we are pleased to announce today that we now offer the standard model 3 of $ 35,000. This is an important milestone for Tesla, the culmination of years of hard work by employees across the company, and something you should all be very proud of. You can read the details of the announcement on our blog: LINK HERE
In addition, we also make the decision to switch all sales worldwide worldwide only.
Last year, 78% of all the Model 3 orders were placed online, rather than in a store, and 82% of customers bought model 3 without taking a test drive. Customers can now buy a Tesla in North America over the phone about 1[ads1] minute, and that opportunity will soon be expanded worldwide. We also make it much easier to try out and return a Tesla without a test drive. You can now return a car within 7 days or 1000 miles for a full refund. Customers are becoming more and more comfortable buying online, especially Tesla – a testament to the products we make.
As a result, in the next few months, we will be phasing out many of our stores and significantly reducing our sales and marketing expenses, which will help to make the price changes we have announced today possible. By switching all online sales in combination with other ongoing cost-effectiveness, we can reduce all vehicle prices by around 6% on average, so that we can achieve the price of $ 35,000 model 3.
remain as galleries, showcases and Tesla information centers. At the same time, we will increase the investment in Tesla service and production, and I expect that the number of employees will grow next year.
Unfortunately, this means that some jobs will be affected or passed to other areas of the business. This is a difficult decision, but it is necessary to make our cars cheaper. Our sales team has fought on the front line to promote our mission and has been our connection with hundreds of thousands of customers along the way. I will express my sincere gratitude for everything you have done.
In the coming weeks, we will evaluate all our sales and marketing organization to understand where it's operational efficiency and how best to support the transition to online sales and continue to deliver a truly amazing and educated Tesla buying experience.
We will share more information about this transition soon.