Elon Musk, Tesla Motors Inc. Chief Executive Officer is said to be ready to let go off overseas executives due to underwhelming sales of the company's luxury electric cars in China.

January saw disappointing figures in the largest Asian nation, with only 120 vehicle purchases, missing company expectations and targets and seriously jeopardizing company plans to expand and boost its business.

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Tesla shares fell 7 percent early this year following the announcement of the surprisingly dismal turnout in China during the fourth quarter last year.

"We'll fix the China issue and be in pretty good shape probably in the middle of the year," a still hopeful Musk said at the start.

However, come end of the month, an internal e-mail to managers stated otherwise, with the CEO threatening to downsize the Chinese counterpart, cutting country managers  and executives if a "clear path to positive long-term cash flow" is not established, sources say.

While Reuters does not have an original copy of the exchange, the transcript of a source reads, "We have no choice in this regard. There is no way that we can afford to subsidize a region of any size in the long term without causing serious harm to the company."

Key officers will be held accountable for keeping non-vehicle production related people (i.e. finance, HR, and IT). Also, underperformance could seriously hurt said officers, with a possible demotion underway. Tesla has made no comment on the e-mail matter as of yesterday. 

In the meantime, two key managers in China had already left the company last year: Kingston Chang and successor Veronica Wu, in March and December, respectively.

The company had seen interest in China mid-2013 for its sole product, the Model S sedan. By January of the next year, it noted the Chinese version of the car would cost US$121,000, inclusive of duties and shipping.

Musk had made bold claims back then, stating in an interview with Bloomberg that sales here would rival those of the United States in 2015, as this model is the most favored US electric car. Its starting price is at US$70,000 and Autodata  purports that 18,700 have been sold in the United States alone.

The forward-looking automobile manufacturer plans to push annual production from 50,000 in 2015 to 500,000 by 2020, to be led by two of the biggest economies in the world, the United States and China. Musk even claimed a few million car would be produced by 2025.

TagsTesla, China sales, Elon Musk, downsizing, Electric Car