Tesla to reduce production hours for Model S and X

Tesla Inc stated on Wednesday it is reducing production hours for higher-priced Model S and Model X cars, just days after stating it would slash jobs as the automaker looks to make more affordable versions of the Model 3 sedan.

The shares of the company dropped 4.2 percent to $286.09.

Tesla also faces the unenviable choice of increasing costs at the risk of losing customers or slashing costs by thousands of dollars every vehicle as the electric vehicle tax break started to phase out from earlier this month.

CEO Elon Musk had said previously this month that Tesla will no longer be taking orders for the 75 kWh version of the Model S and X to streamline production.

“As a result of this change and because of improving efficiencies in our production lines, we have lowered Model S and X production hours accordingly,” a Tesla spokesperson stated in an email according to Reuters.

“These changes, along with continuing improvements, give us the flexibility to boost our production capacity in the future as needed.”

The company stated it will provide more details on the revenues call scheduled for next Wednesday.