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Tesla To Cut Costs To Increase Model 3 Production Rate; Sees Tiny Profit In Q4

Tesla CEO Elon Musk, in an email sent to all employees, confirmed the company will reduce full-time employee headcount by approximately 7% and retain only the most critical temps and contractors. Elon Musk stated that Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. He noted that higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range, standard interior Model 3 at $35k and still be a viable company.

Tesla CEO stated that, fourth-quarter preliminary, unaudited results indicate that the company again made a GAAP profit, but less than third-quarter.

Tesla shares were down more than 7% in pre-market trade on Friday.

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