Tesla Shanghai Poised for Go Slow

Tesla Shanghai Poised for Go Slow

A new year's resolution has been made for 2023 by the most popular electric vehicle brand in the world, which is also led by one of the most popular tweeters in the world. A report based on internal schedules that were leaked claims that Tesla wants to reduce vehicle output for January at its primary China manufacturing facility. It would be interesting to see whether the corporation maintains its resolve after the 2023 starting gun or if it reverts to its previous behaviour.

The corporation will have manufacturing run from January 3 to January 19 but then reduce production from January 20 to January 31 according to a leaked internal production schedule from Tesla. The vacation coincides with Chinese New Year, which takes place from January 21 to January 27; nevertheless, it should be noted that this is the first time the business has made any accommodations for the holiday. Additionally, it comes after Tesla halted production at the facility from Dec. 24 until Jan. 1.

A production freeze can be seen as a bad omen since the company's Shanghai, China plant produced half of its Tesla cars in the first half of 2022. Although the corporation has pledged a 50% increase in output from year to year, analysts believe that figure will actually only be a meagre 45%.

Burning Cash

The factory has over 20,000 total employees. It's not known if employees would be compensated for any downtime. The Shanghai Giga factory has been under fire in the past for its labor practices, with 12-hour shifts five days per week. Due to frequent lockdowns earlier this year, the firm reportedly required employees to live and sleep there. The reductions in Shanghai heading into 2023 do not suggest the electric vehicle firm expects much to change in the new year, especially given Tesla CEO Elon Musk's earlier claims that its other plants in Texas and Germany are "money furnaces" while blaming supply chain problems.

Despite being a multi-billion-dollar company, a former employee reportedly dubbed it "scrappy." Even in 2021, the CEO's emphasis on cost-cutting was evident. In any case, business has been difficult for the organization during the previous few months. Unnamed sources were used in other reports to claim that Tesla was enforcing a hiring freeze and firing employees. The announcement followed a stop in hiring in June due to a gloomy outlook for the entire global economy. For the first time in more than a year, Tesla's profitability fell in July of last year.

Tesla production line

COVID and Twitter in the mix

Since the country switched on its baffling "zero covid" policy, China has seen an increase in the number of new covid infections. And with a wave of anti-government protests spreading across the country, it led to overwhelmed hospitals with staff struggling to manage the number of new patients.

Due to his continuing position as the head of Twitter, Musk has been preoccupied and has neglected his duties as the CEO of Tesla. Since the billionaire sold $3.6 billion worth of Tesla shares earlier this month, several experts are openly questioning if the man in charge can be loyal to his former company after his $44 billion purchase of the platform. Since the start of 2022, Musk sold shares in Tesla worth $23 billion, according to the Securities and Exchange Commission. Even after promising to halt selling shares in order to assist finance the Twitter acquisition, this continued. Tesla's stock price is sputtering along in the meanwhile; on Tuesday, it dropped below $120 per share.