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Tesla Inc.’s (NASDAQ: TSLA) Shanghai Factory Have Taken the Unprecedented Step about Incentives

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Tesla Inc. (NASDAQ: TSLA) slightly up around 1% in pre trading session on Monday after learning over the weekend that a performance incentive had been reduced, employees from Tesla’s Shanghai factory have taken the unprecedented step of posting on social media to appeal to Elon Musk and the Chinese public.

Tesla’s Shanghai plant, which began operations in late 2019, is the automaker’s largest manufacturing hub. It builds the Model 3 and Model Y vehicles for the China market and export. The plant employs some 20,000 workers and accounted for more than half of Tesla’s global output in 2022. China is Tesla’s second-largest market after the United States by volume.

Tesla’s Gigafactory Shanghai, the first auto plant to be fully owned by a foreign company, cut output in December and extended a holiday period in January in response to rising inventory before announcing price cuts of between 6% and almost 14% in China, part of a wave of discounts the automaker has rolled out globally this year to stoke demand.

According to a safety report issued last week by the local government in Shanghai’s Pudong district, where the factory is located, an accident in the welding workshop at the Shanghai plant claimed the life of a worker on February 4.

According to the investigation, the worker had primary responsibility for the disaster, although the company’s safety management played a supporting role. When some Tesla employees learned that their performance awards would be reduced as a result of the accident, they vented their displeasure on social media.

Earlier this year, Tesla appointed Tom Zhu, its China CEO, to assume management of its worldwide manufacturing and sales. The Tesla Shanghai facility under Zhu was able to quickly catch up on output lost the previous year as a result of COVID lockdowns in China. Zhu was among the first group of workers to spend the lockdown sleeping inside the facility as Tesla attempted to maintain productivity during a period of severely restricted mobility for staff and suppliers.

Tesla stated earlier this month that it will establish a facility outside of Shanghai to create energy-storage devices that link to the grid and store electricity for times of high demand.

According to Tesla’s website, a single Megapack costs slightly under $2.7 million in California.

According to Tesla, the new Megapacks facility will be able to produce 10,000 of the shipping container-sized modules annually. The business has a Megapack facility already in operation in California with an order backlog that extends until early 2025.

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