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Tesla’s Shanghai plant, targeted by worker protest, is key hub for EV maker

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Workers from Tesla’s (TSLA.O) Shanghai factory have taken the unusual step of posting on social media to appeal to Elon Musk and the Chinese public after being told over the weekend that a performance bonus had been cut.

Here are key facts about Tesla’s operation in Shanghai:

BACKGROUND

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.

RECENT OUTPUT TRENDS

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 per cent and almost 14 per cent in China, part of a wave of discounts the automaker has rolled out globally this year to stoke demand.

FATAL ACCIDENT

On Feb. 4, an accident in the welding workshop at the Shanghai plant killed a worker, according to a safety report released last week by the local government in Shanghai’s Pudong district, where the plant is based.

The report said the company’s safety management contributed indirectly to the accident but the worker had direct responsibility. Some Tesla workers were told their performance bonuses were being cut because of the accident and took to social media to protest.

KEY EXECUTIVE

Tesla promoted its China chief Tom Zhu to take oversight of its global production and sales earlier this year. Under Zhu, the Tesla Shanghai plant managed a quick rebound 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 as Tesla sought to sustain output at a time of sharply limited travel for workers and suppliers.

NEW BATTERY PLANT

Earlier this month, Tesla announced it would open a factory outside Shanghai to build energy-storage systems that connect to the grid to store power for peak demand.

Tesla said the new plant for Megapacks would have the capacity to make 10,000 of the shipping container-sized units a year. The company has an existing Megapack plant in California and a backlog of orders until early 2025.

A single Megapack costs just under $2.7 million in California, according to Tesla’s website.

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