REPORT: Tesla only sold 120 cars in China in January -- Elon Musk threatens to fire executives

Tesla sold only 120 cars in China in January, a Tesla source told Reuters.

CEO Elon Musk is now prepared to fire overseas executives as the number was well below company targets, people with knowledge of the matter told Reuters.

Reuters, citing sources who have seen the email, says that Musk “threatened to fire or demote country managers if they are ‘not on a clear path to positive long-term cash flow.'”

Two top China managers left the company in 2014.

Tesla had no immediate comment.

If Tesla sales in China were disappointing in January, it will continue a negative trend from the fourth quarter of 2014, when Musk said that sales were “unexpectedly weak.”

Musk recently addressed questions about Tesla’s business in China, explaining that the company had some difficulty getting customers to understand how Tesla cars worked with the country’s electric-charging network.

He told a group of journalists at the Detroit Auto Show in January that those misperceptions had been cleared up.

Tesla will report fourth-quarter 2014 earnings on Wednesday. Analysts and observers expect the company to have delivered fewer cars for the year than predicted but to still top 30,000 deliveries for all of 2014.

China is considered by Tesla to be an important growth market. The carmaker has been steadily building out its Supercharger network there; it began selling its Model S sedan in China last year.

There has been some confusion about weaker-than-expected Tesla vehicle deliveries indicating that demand for the company’s cars is waning.

Musk has repeatedly stressed that Tesla doesn’t have a demand problem. Rather, the CEO has said that Tesla is constrained in the number of vehicles it can produce and doesn’t want to force customers who have put down deposits to have to wait for their cars.

More to come.

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