Elon Musk is NOT happy with just 150 Model S sales in China in January

Firings Could Be On The Horizon

There's been some debate about how Tesla is really doing in China - a cornerstone market for the California company - and whether media stories about troubles there are overblowing the situation. Just last July it was breaking quarterly records with the help of 1,000 sales in China and we called the momentum "gangbusters." Then the news trend went the opposite direction for the rest of the year, with the company's two top managers resigning and a constant rill of speculative articles laying out the various issues Tesla was having there and why it's switching up its disclosures.

Well, the issue might be overblown, but there is definitely something brewing in China. Reuters was shown a transcript of an e-mail Elon Musk sent to regional managers at the end of January after they sold 120 cars for the month. Those 120 sales were on the heels of "unexpectedly weak" sales in Q4 last year, when Musk said the China situation would "be in pretty good shape probably in the middle of" 2015. In the missive he said managers could be fired or demoted if they can't show that they're "on a clear path to positive long-term cash flow." He also wrote that that specialized roles and any personnel outside of vehicle production would need to be justified because, " There is no way that we can afford to subsidize a region of any size in the long term without causing serious harm to the company."

In 2013, when Tesla was ramping up for sales in China, Musk predicted that market would be about on par with the US by this year; Tesla sold almost 19,000 cars in the US last year, and a 120-unit January won't get China anywhere near those numbers. We're sure there'll be a lot of questions about the e-mail, the Chinese market, and Tesla's projections when the company holds a conference call for analysts after presenting its 2014 results later today. For one in-country assessment of Tesla's troubles, check out this piece on Car News China. We reached out to Tesla about the China email, but were told the company had no comment.

Tesla CEO Says China Sales Weak, Promises Model X by Third Quarter

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