China is Tesla's second-largest market after the US, contributing 34.23 percent of its global deliveries in the first quarter.

(Image credit: CnEVPost)

Tesla (NASDAQ: TSLA) is laying off more than 10 percent of its workforce globally, and the China team is being affected.

The US electric vehicle (EV) maker's global layoffs are hitting employees in its China team, including sales, Reuters said in a report today, citing two people familiar with the matter.

Some employees of Tesla's China sales team were being notified, with one of them saying that more than 10 percent will lose their jobs, the report said, adding that a second source said other teams were also affected.

The company's CEO, Elon Musk, told employees in an internal memo Monday that Tesla will lay off more than 10 percent of its global workforce in response to declining sales and an intensifying EV price war.

"This will enable us to be lean, innovative and hungry for the next growth phase cycle," Musk said in that memo.

As of December 31, 2023, Tesla had 140,473 employees worldwide, according to one of the company's SEC filings. It employs about 20,000 people in China.

Tesla has a factory in Shanghai that produces the Model 3 sedan and Model Y crossover. Vehicles produced at the plant are delivered to local consumers as well as being an export hub for Tesla.

The EV maker delivered 386,810 vehicles globally in the first quarter, a decrease of 8.53 percent year-on-year and down 20.16 percent from the fourth quarter of 2023, according to figures it announced on April 2.

That's the first time since the second quarter of 2020 that Tesla's global deliveries have seen a year-on-year decline, and well below analysts' estimates of 449,080 vehicles.

Tesla sold 132,420 units in China -- its second-largest market after the US -- in the first quarter, contributing 34.23 percent of global deliveries, according to data compiled by CnEVPost.

In March, Tesla sold 62,398 vehicles in China, up 107.02 percent from 30,141 in February, though down 18.61 percent from 76,663 a year earlier.

Its Shanghai plant exported 26,666 vehicles in March, down 11.77 percent from 30,224 in February while up 118.47 percent from 12,206 in the same month last year.

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