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Tesla will reduce production of the Model S and Model X, according to a report from Bloomberg.
“Tesla has set substantially lower daily production targets for the Model S and Model X, according to current and dismissed employees who asked not to be identified discussing plans that aren’t public,” Bloomberg reported.
A Tesla spokeswoman told the outlet that the reduction is related to the removal of entry-level versions of the Model S and Model X starting Jan. 14.
“We recently announced that we are no longer taking orders for the 75 kWh version of Model S and X in order to streamline production and provide even more differentiation with Model 3,” Tesla said in an emailed statement to Bloomberg. “As a result of this change and because of improving efficiencies in our production lines, we have reduced Model S and X production hours accordingly.”
Tesla built 61,394 Model 3 sedans in the fourth quarter, and a total of 25,161 Model S and Model Xs.
The news comes days after Tesla announced layoffs impacting 7 percent of its workforce. Chief Executive Elon Musk said the cuts are needed to bring down costs to make the cars more affordable. The company also feels profitability will be threatened as the lower-priced Model 3 comes to market.