Tesla announced yesterday that it will reduce production hours for the Model S and Model X. This follows news of Tesla cutting seven percent of their workforce and dropping 75D variants of the S and X.

“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. 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 said in a statement to Bloomberg.

According to unnamed current and former employees, Tesla has set "substantially lower daily production targets" on the Model S and X. Tesla declined to comment when asked about the production targets.

This is causing concern to grow about the demand for Tesla's more expensive (and profitable) vehicles, as it gears up to get more Model 3s out the door.

Source: Bloomberg

Hat tip to @balthazar for notifying us about this story.

View full article

To be expected as they want to be a major auto player. Model line up will change and sales of their old S and X which need a major refresh will fall off.

Why buy an S when the 3 is better than current S? ?

Only way the 3 is better than the S is that it isn't nearly as expensive (tho it's still not "affordable").

Seems clear to me that cannibalization is going on here.

I think the problem is that they have two platforms here. Some auto analyst somewhere mentioned this too. Tesla has two platforms which may have been a big blunder, as their factory is tooled for component sets that while similar...aren't assembled in sequence.