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China is Tesla's second-largest market after the US, contributing 34.23 percent of its global deliveries in the first quarter.
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Earlier this week, Tesla began notifying some employees on the battery cell assembly lines at the first phase of its plant in Shanghai about that layoff, according to Bloomberg.
(Image: Screenshot from a Tesla China video.)
Tesla (NASDAQ: TSLA) is laying off some battery production workers at its Shanghai plant, amid heavy discounts on cars from all manufacturers, Bloomberg reported today.
Earlier this week, Tesla began notifying some employees on the battery cell assembly lines at the first phase of its plant in Shanghai about the layoffs, the report said, citing people familiar with the matter.
Some employees have been allowed to move to another shop, such as stamping, painting or general assembly, the people said. It's unclear how many battery workers may be let go, or the specific reasons behind the layoffs, according to the report.
Tesla employs about 20,000 people at its Shanghai plant, which can produce about 1 million vehicles a year, the report noted.
While Tesla uses batteries made by LG Energy Solution and CATL in its vehicles, those battery cells must be made into battery modules and packs before they can be installed in the cars, a process that is done for the most part in Tesla's battery workshop.
Some automation equipment that could help replace human labor on the battery production line is in the design and construction stages, one of the people said, according to the report.
The report did not provide more details on the layoff plan, though a local media outlet reported yesterday that more than 50 percent of the phase one battery assembly line workforce would be cut.
The layoffs are partly due to the US government's ban on subsidies for batteries imported from China, requiring local car companies to use US-made batteries, Chinese media outlet Shifang Zhixing said in a report yesterday, citing an insider.
In addition, the ample battery assembly capacity at Tesla's Shanghai plant is also a major reason for the layoffs, according to the report.
The battery assembly line in phase two has a capacity of 870 batteries on a single shift, while the day shift plus the night shift in the two battery plants can provide 3,400 batteries, more than the amount needed for vehicle production, according to the report.
Vehicle manufacturing-related jobs have not been affected by the layoffs yet, after all, Tesla vehicle sales are still strong, the report said.
Tesla sold 93,680 China-made vehicles in June, including exports, the second highest on record after 100,291 in November 2022, according to data released by the China Passenger Car Association (CPCA) on July 4.
Tesla's Shanghai plant produces the Model 3 and Model Y, and their breakdown sales figures are currently unknown.
In May, Tesla sold 42,508 vehicles in China, ranking third in China's new energy vehicle (NEV) market with a 7.3 percent share, according to the CPCA. Tesla's Shanghai plant exported 35,187 vehicles in May.
Model Y retail sales in China in May were 31,054, making it the best-selling SUV in China that month, according to the CPCA's rankings.
From January to May, Model Y retail sales in China were 152,461 units, also the best-selling SUV in China during that period.
Yesterday, 16 car companies, including Tesla, BYD, Nio, Xpeng and Li Auto, signed a pledge in Shanghai to jointly maintain order in China's auto market and not to disrupt fair competition with abnormal prices.
Earlier today, Tesla ramped up referral incentives for the Model 3 and Model Y in China to boost sales of the two models.
Tesla to equip revamped Model 3 in China with CATL's new battery, report says
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Zhu, 43, has been officially named senior vice president of Tesla's automotive business.
Tom Zhu, who has made significant contributions to the development of Tesla's China business, has been officially named one of the top four executives at the US electric vehicle (EV) maker.
Zhu, 43, has been named senior vice president of Tesla's automotive business, according to a filing the EV maker made with the US Securities and Exchange Commission yesterday.
"Tom Zhu has served as our Senior Vice President, Automotive since April 2023," the filing reads.
Here is a brief description of Zhu in the filing:
Mr. Zhu joined Tesla in April 2014, and served in various operational roles before being appointed as Vice President, Greater China, where he led the construction and operations of Gigafactory Shanghai.
Mr. Zhu holds a bachelor's degree of commerce in information technology from the Auckland University of Technology and an M.B.A. from Duke University.
Zhu joined Tesla in April 2014 as the director of the EV maker's Supercharger program in China.
In July 2019, he was mentioned in media reports as Tesla's global vice president and president of Greater China region.
Rumors of Zhu receiving a promotion at Tesla began to emerge from late last year.
On July 8, 2022, Bloomberg cited people familiar with the matter as saying that Tesla had changed its management structure in the Asia-Pacific region, with executives in the region now reporting to Greater China rather than the United States.
Senior executives in the region report to Zhu, then president of Tesla China, meaning he also oversees Tesla's Asia Pacific region, a position previously held by US executives, according to the report.
On December 8, local media outlet Ping West reported that Tesla CEO Elon Musk would have Zhu succeed him as CEO of the EV maker.
Zhu's CEO position would be global, but the scope of responsibilities would likely be limited to Tesla's automotive business and not include self-driving and robotics programs, the report said.
Zhu has been promoted to head Tesla's US assembly plants and sales operations in North America and Europe, Reuters said on January 3, citing an internal report line announcement.
The move makes Zhu the highest-profile Tesla executive since Elon Musk, with oversight for deliveries in all of its major markets and all of its production outside the still-ramping Tesla plant in Germany, the report noted.
Zhu's promotion is apparently related to Tesla's China business becoming increasingly important.
Tesla delivered 422,875 vehicles worldwide in the first quarter, including 412,180 Model 3 and Model Y vehicles and 10,695 Model S and Model X vehicles, according to figures it announced April 2.
Tesla's China-made vehicles delivered 229,322 units in the first quarter, up 25.88 percent from 182,174 units in the same quarter last year, according to data from the China Passenger Car Association (CPCA) monitored by CnEVPost.
This means that 54 percent of Tesla's global deliveries in the first quarter were made at the Shanghai plant.
Tesla sells 88,869 China-made vehicles in Mar, CPCA data show
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