Sina Technology News Beijing time on the evening of December 8, according to reports, multiple people familiar with the matter said today that Tesla will shorten the working hours of production line workers at the Shanghai factory as early as next Monday, and has delayed the start of some new employees. This further shows that the market demand for Tesla electric vehicles has not met expectations.
Currently, Tesla’s Shanghai plant operates two shifts of 11.5 hours per day, these people said. After the adjustment, there are also two shifts, but the working hours of each shift are reduced to 9.5 hours.
A production schedule obtained by the media shows that the change is planned to start next Monday, but it may also be adjusted at the last minute. Shorter hours will lead to lower monthly wages for production workers, the people said.
Shares of Tesla were down as much as 2.3 percent in premarket trading after the news, at $170 a share.
Earlier this week, it was reported that Tesla plans to cut the production of Model Y and Model 3 production lines in Shanghai by about 20% this month. But a Tesla representative later said the cuts were “baseless,” without elaborating.
In addition to the adjustments to working hours, the onboarding process for some new hires has also been suspended, the people said. Some employees who were due to start production in November, including those on Tesla’s battery cell plant and vehicle assembly lines, have been told to delay their start. Tesla recruiters told them to be ready to start work after the Lunar New Year holiday (in late January next year) because there is no immediate need for more workers, one of the people said.
A Tesla representative declined to comment.
Currently, Tesla is facing fiercer competition from China’s local electric car manufacturers. Recently, Tesla has upgraded the Shanghai factory, increasing the annual production capacity to about 1 million vehicles. But at the same time, Tesla has also recently introduced price cuts and incentives, suggesting that demand for its electric vehicles has not kept pace with increased supply.
On Wednesday, Tesla offered another 6,000 yuan ($860) subsidy to customers who buy and pick up new cars this month, suggesting Tesla has inventory to clear.
For Tesla, the Chinese market is crucial. Musk expects Tesla to grow 50% annually in the global market over the next few years. To achieve this goal, maintaining the continuous growth of the Chinese market is particularly critical.
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Event Tracking
- 2022-12-08Tesla demand declines: Shanghai factory delays new employee entry and shortens shift time
- 2022-12-05 Tesla’s Shanghai plant will take the initiative to cut production by 20% as demand falls short of expectations
- 2022-05-04 It is rumored that Tesla will set up a second factory in Shanghai, the internal number: it is expansion, not the second factory
- 2022-04-04 Tesla’s Shanghai factory has been shut down for nearly a week
- 2022-02-24 It is reported that Tesla will build a second factory in Shanghai, and insiders say the news is not true
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