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Elon Musk Sees Boost Amid Cost-Cutting, Layoffs as Europe Clears Tesla to Sell Model 3s Next Month

Last Updated September 23, 2020 12:22 PM
Mark Emem
Last Updated September 23, 2020 12:22 PM

By CCN.com: Tesla has been granted the go-ahead to begin selling its mass-production, low-cost electric car in Europe.

Beginning February, Tesla will be able to sell the long-range version of the Model 3, per Bloomberg . From Tesla’s website, the long-range model runs for 310 miles on one full charge. Permission was granted by the Dutch vehicle authority Rijks Dienst Wegverkeer (RDW).

The development will likely increase Tesla’s sales significantly. This is because the European market for midsized premium sedans is twice as big as the U.S. market. In a statement issued earlier this month, Tesla had hinted about the European entry as CCN.com reported:

There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing. International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019.

Tesla goes to Europe as Volkswagen eyes U.S. electric car market

While the move gives the electric carmaker an opportunity to take on European rivals, some of them are also getting ready to fight Tesla in its home turf. Last week German auto giant Volkswagen announced that it would be investing $0.8 billion in expanding an electric vehicle factory located in Chattanooga, Tennessee.

Volkswagen’s first electric vehicle from the plant is expected to roll off the production ramp in three years. By 2025 Volkswagen expects to be producing one million electric vehicles annually.

The announcement by Volkswagen could not have come at a worse time for Tesla. This is because the electric car maker is currently facing significant headwinds in its domestic market. Beginning January 1, for instance, the U.S. federal tax credit was halved to $3,750 thereby making Tesla vehicles more expensive.

Tesla Axes 3,000 employees

And late last week, Tesla announced it would be laying off 7% of its workforce, or around 3,000 people. The announcement led to Tesla’s share price plummeting by over 10% from $348. It is currently trading at slightly above the $300 support level.

Tesla’s stock price plummeted last week. Source: TradingView

The knock on Tesla’s share price has seen General Motors retake the crown as the largest U.S. carmaker by market capitalization.

Other cost-cutting measures that Tesla has undertaken include scrapping a customer referral program starting February 1.

Putting aside the financial hardships that Tesla is facing, the electric car maker has proven itself dominant in the marketplace. Last year, for instance, the Model 3 emerged as the best-selling vehicle in the luxury category managing to beat such icons as the BMW 3 Series and the Audi Q5.