Elon Musk. Photo: Mario Tama/Getty Images

Tesla is slashing its full-time workforce by about 7% as production of the Model 3 sedan ramps up, CEO Elon Musk said in a company email on Friday.

Why it matters: The announcement comes as Musk is trying to make good on pledges to begin offering lower-priced variants of its Model 3, a car critical to the company's future.

  • Musk acknowledged that "the road ahead is very difficult."
  • "[S]tarting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles," he wrote.
  • Musk also said that the company's 4th-quarter financials are again expected to show a profit, albeit smaller than its Q3 profit of 4%.
  • In pre-market trading, Tesla's stock dropped roughly 6% after showing even steeper declines earlier in the morning.

By the numbers: Currently the cheapest Model 3 is a 264-mile range that's $44,000, Musk noted.

  • "The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely."

Where it stands: Per Bloomberg, a 7% workforce cut means shedding about 3,150 jobs. From their piece...

  • "While it succeeded in scaling up output of its Model 3, the company missed analysts’ production targets during the fourth quarter, and it’s had to cut prices to make up for the halving of a U.S. federal tax credit that’s helped spur sales."

Editor's note: This story was updated with new market information.

Go deeper

How "naked ballots" could upend mail-in voting in Pennsylvania

Trump signs in Olyphant, Penn. Photo: Eric Baradat/AFP via Getty Images

Pennsylvania's Supreme Court ordered state officials last week to throw out mail-in ballots submitted without a required inner "secrecy" envelope in November's election, the Philadelphia Inquirer reports.

The state of play: The decision went under the radar alongside the simultaneous decision to extend the time that mail-in ballots could be counted, but Philadelphia's top elections official warned state legislators this week that throwing out so-called "naked ballots" could bring "electoral chaos" to the state and cause "tens of thousands of votes" to be thrown out — potentially tipping the presidential election.

Commission releases topics for first presidential debate

Moderator Chris Wallace. Photo: Drew Angerer/Getty Images

Fox News anchor Chris Wallace has selected what topics he'll cover while moderating the first presidential debate between President Trump and former Vice President Joe Biden next week.

What to watch: Topics for the Sept. 29 debate will include Trump and Biden's records, the Supreme Court, COVID-19, economic policy, racism and the integrity of the election, the Commission for Presidential Debates announced on Tuesday. Each topic will receive 15 minutes of conversation and will be presented in no particular order.

Fed chair warns economy will feel the weight of expired stimulus

Treasury Secretary Steven Mnuchin and Fed Chair Jay Powell bump elbows before House hearing on Tuesday. Photo: Joshua Roberts/Pool/AFP via Getty Images

Federal Reserve Chairman Jerome Powell told the House Financial Services Committee on Tuesday that the expiration of Congress' coronavirus stimulus will weigh on the U.S. economy.

Why it matters: Powell warned that the effects of dried-up benefits are a looming risk to the economy, even if the consequences aren't yet visible.

Get Axios AM in your inbox

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Subscription failed
Thank you for subscribing!