TESTLA Motors Inc. chief executive Elon Musk is prepared to fire overseas executives, people with knowledge of the matter said, after weak Chinese sales of the company’s luxury electric cars cast doubt on his ambitious global expansion plans.

    Tesla sold about 120 cars in China last month, one of the sources told Reuters, well below the company’s aggressive targets. Musk has previously said he expected China sales could rival those in the United States as early as 2015. Two top China managers left the company in 2014, Tesla said last year.

    The sources, who spoke to Reuters over the past two weeks, were not willing to speak for attribution because of the sensitivity of the matter.

    Tesla shares slumped 7 percent Jan. 13 after Musk said China sales were “unexpectedly weak” during the fourth quarter. “We’ll fix the China issue and be in pretty good shape probably in the middle of the year,” Musk added at the time.

    He was more blunt in an internal email to managers in late January, threatening to fire or demote country managers if they are “not on a clear path to positive long-term cash flow,” according to two people who have seen the email.

    China is a linchpin of Musk’s expansion strategy, but so far results have fallen far short.

    Musk has said Tesla plans to boost annual production from a projected 50,000 cars this year to 500,000 by 2020, with the United States and China as the company’s two largest markets. In January, Musk made an even more bullish projection that production would reach “a few million” cars a year by 2025.

    China sales, meanwhile, continue to lag expectations, triggering an executive shuffle. The company in mid-December confirmed the departure of China manager Veronica Wu. Her predecessor, Kingston Chang, left Tesla last March.

    Musk in the internal email said underperforming company managers “will be asked to leave or assume a more junior role. This has already happened in China and will likely happen in some other countries, too.”

    Tesla began taking orders in China in mid-2013 for its sole product, the Model S sedan, and in January 2014 said the Chinese version of the car would be priced from around US$121,000, including duties and shipping costs. In an interview at the time with Bloomberg, Musk said Tesla sales in China might equal those in the United States as early as 2015.

    Since then, however, Tesla has encountered several speed bumps in China, including the departures of the two executives and the slower-than-expected ramp-up of its retail network.

    Tesla might outline its planned response to those setbacks as early as yesterday, when Musk was scheduled to present quarterly earnings to investors.

    “China has been a big disappointment and that’s bound to impact company goals,” a person close to the firm said.(SD-Agencies)