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“Tesla’s Shanghai Factory: A Critical EV Hub Amidst Worker Protests – Factbox”

Tesla workers at the company’s Shanghai factory have turned to social media to seek Elon Musk’s and the Chinese public’s support after they were informed of a reduction in their performance bonus over the weekend. The Shanghai plant, Tesla’s biggest manufacturing hub, produces Model 3 and Model Y vehicles for both the local market and export. It employs around 20,000 workers, accounting for over half of Tesla’s global output in 2022, and is Tesla’s second-largest market by volume after the US.

In December 2022, Tesla’s Gigafactory Shanghai cut output and extended the holiday period in January in response to rising inventory, leading to a wave of price cuts between 6% and almost 14% in China, as the company aimed to boost demand. In February, a fatal accident occurred at the welding workshop at the Shanghai plant, leading to the death of a worker. A safety report by the local government in Shanghai’s Pudong district attributed the accident to the worker’s direct responsibility but said the company’s safety management contributed indirectly to the accident. Following the incident, some Tesla workers were informed of performance bonus reductions, leading to their protests on social media.

Earlier this year, Tesla promoted its China chief Tom Zhu to oversee its global production and sales. Under Zhu, the Shanghai plant quickly recovered from lost production last year due to COVID lockdowns in China. During the lockdown, Zhu was among the first batch of employees sleeping in the factory to maintain output at a time of limited travel for workers and suppliers.

Recently, Tesla announced its plan to build an energy-storage systems factory outside Shanghai, producing Megapacks for grid connection to store power for peak demand. The new factory will have the capacity to manufacture 10,000 Megapacks annually. Tesla already has an existing Megapack plant in California and a backlog of orders until early 2025. The cost of a single Megapack in California is just under $2.7 million, according to Tesla’s website.

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