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Delivery employees said to be cut

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A Tesla Model 3 is seen in the general assembly line at the Tesla factory in Fremont, California, on Thursday, July 26, 2018.

At the Model 3 launch in July 2017, Musk said over half a million buyers had put down deposits on the new car. That helped send Tesla shares up almost 15 percent over the following six weeks.

The company delivered 145,610 Model 3s in 2018, but all of them at prices far above $35,000. Musk said last week a $35,000 version that could be sold profitably was perhaps six months away. Even with two price cuts this year, the lowest price tag on a Model 3 is now $42,900.

Musk maintains that Model 3 demand is “insanely high,” but his company has not released any figures to demonstrate that.

Asked about the reservations list last week by analysts, outgoing Chief Financial Officer Deepak Ahuja declined to disclose how many people remained, calling it “not relevant.”

Musk has said Tesla has multiple ways of stoking demand, if it chose to, such as offering leases or boosting marketing efforts.

The Model 3s now rolling out of Tesla’s Fremont, California, factory are going to Chinese and European buyers, Tesla says.

The two laid-off employees said delivery targets for North America — made up of mostly U.S. buyers — this quarter would be 55 percent to 60 percent of what they were in the last quarter of 2018.

If Tesla does not cut prices soon, it risks losing potential customers — and ones already on its reservation list — to a slew of German and Asian competitors whose electric vehicles will hit the U.S. market this year. Each of the new entrant’s first 200,000 buyers will be eligible for a full federal subsidy.

Having met that number already, the U.S. tax credit for Tesla buyers drops in half to $3,750 for the first six months of 2019, then falls by half again in the second six months.

Musk said last month his “rough guess” was that Tesla would begin building the $35,000 Model 3 in mid-2019.

One of the sources said that could recharge U.S. demand: “If there was a Model 3 for $35,000 that was still a really good car, that blows away the competition, I could see demand going through the roof.”

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