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Tesla Motors Inc Rival Makes Big Promises, Slashes Employee Pay

Tesla Motors Inc (TSLA) Model X

Tesla Motors Inc is a big name in the EV world, and beating it will be no easy task. Porsche is learning this as it moves ahead with the development of its Mission E, which is truly an exciting concept. The firm has to resort to pay cuts to fund its electric sports car, says a report from Reuters.

Tesla Motors Inc Model X
Model X parked outside Tesla Motors’ Fremont plant.

Pay cuts to fund Mission E

Porsche employees have agreed to the pay cut, and the total saving will amount to several hundred million euros, Reuters says. In December, the car maker said to invest 1bn Euros or $1.1bn on the project, and producing the Mission E will create 1000 new jobs.

Last week, a spokesman for Porsche said, “Employer and employees have jointly drawn up measures that have led to the decision of producing the Mission E model at Zuffenhausen.”

Porsche is aiming to unveil Mission E by the end of the decade, and claims the car will be able to charge 80% charged in just 15 min. In comparison the Tesla Model S can charge up to 50% in around 20 min. However, we must not forget that Tesla Motors has few years to improve as new Porsche car is still few years away.

Coming to road performance, Porsche claims Mission E can go 0 to 62 mph in 3.5 seconds, and will have a range of around 311 miles. Tesla Motors Inc Model S can go 0 to 60 in 2.8 seconds, but it is only after Ludicrous Mode upgrade, which costs $10,000 and the range is also limited to 270 miles.

Will Tesla solve China puzzle in 2016?

The Porsche Mission E does not appear to be a major worry for Tesla Motors now, but China still remains a concern for the US firm. The first half of 2015 did not go well for the firm in the East Asian giant. The US firm faced tax breaks favoring local firms, complex local license-plate laws and several local and well-funded copycats.

Such issues are expected for a US firm in China, but for Tesla Motors it was a bit hard to absorb. The firm was not able to sell as many cars as forecast last year, and also slashed its Chinese work force in 2015.

But, things are starting to look good of late. In October, the firm revealed a plan to open its first manufacturing facility in China. This will help the firm to lower the cost of its cars by more than one-third. The US firm is also planning to partner Chinese firms, and “seeking to streamline Beijing’s complex license-plate lottery for buyers of its cars,” says TechCrunch.

Such efforts from the US firm may lead to hopes that 2016 could be a turnaround year for Tesla Motors Inc in China.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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