"There isn't any other way", Musk wrote.
The layoff follows a 9 percent cut last June, amid a broader restructuring effort.
He has argued the market for electric vehicles is already established and "no longer needs the crutch of government assistance". At the end of the email, Musk mentions that Tesla has the most exciting upcoming products of any "consumer product company", saying that "full self-driving", the Semi truck, the new Roadster, a pickup, a Model Y crossover, and more are all on the way.
Jaguar Land Rover earlier this month said it was cutting 4,500 jobs as it deals with slowing sales, while Ford has also said it will cut thousands of jobs in its European operations. And Tesla is facing a number of headwinds in the coming months.
Tesla will cut 7 percent of its workforce as it tries to lower prices and break out of the niche-car market to produce an electric vehicle that more people can afford. Tesla began taking deposits for the auto three years ago and has yet to deliver at that price point.
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"As we all experienced first-hand, previous year was the most challenging in Tesla's history". The company is also expanding in Europe and China, which will be costly, said Sven Diermeier, a Frankfurt-based analyst at Independent Research GmbH. "The real future for EVs is luxury cars like the Jaguar I-Pace and automated delivery and taxi services". But electric cars of all makes remain vastly more expensive than equivalent models powered by an internal combustion engine, at a time of relatively low oil and therefore gasoline/petroleum prices.
"The road ahead is very hard", Musk said. After that threshold, it's halved, and then halved again before it is phased out.
Elon Musk speaks at a SpaceX event in Hawthorne, Calif., Sept. 17, 2018. Both Tesla and Musk were fined $20 million. Musk had been sued for fraud and misleading investors about taking the company private. On Thursday, Musk announced that Tesla was ending its referral program, which provided free use of Tesla's supercharger network for six months.
"There are many companies that can offer a better work-life balance", he wrote.
Tesla reported strong cash flow and profits in the third quarter of 2018-the first time that has happened in several years. The company plans to begin production there of the Model 3 and a planned crossover by the year's end.
The carmaker also sold "nearly as many cars" as in all the previous years combined, and the Model 3 climbed to the top of sales charts in the premium segment of the US market.