Tesla’s Shanghai Factory Rumoured to Lay off Battery Assembly Employees

According to the report from “Shi Fang Zhi Xing,” Tesla’s Shanghai factory has started laying off employees related to battery assembly. This round of layoffs mainly affects employees in the first phase of battery assembly, with over 50% of them being laid off. Most of them will receive negotiated compensation, while a small number will be transferred to other positions. The equipment used in the first phase of battery assembly will also be dismantled or relocated.

According to the report, insiders believe that the reason for Tesla’s recent layoffs is related to US government policies. The US government prohibits subsidies for imported batteries from China and requires the use of locally manufactured batteries in the United States. This has led to canceled export orders for batteries from Tesla’s Shanghai factory, resulting in excess production capacity. As a company focused on efficiency, Tesla cannot tolerate resource waste.

However, The vehicle manufacturing team at Tesla’s Shanghai factory has not been affected. Manufacturing is Tesla’s main business, and in order to meet the increasing demand for production, the company continues to increase its workforce. The company delivered 1.3 million vehicles last year and expects to deliver at least 1.8 million vehicles by 2023, which means Tesla needs to continue improving its production capacity to achieve this goal. According to data released by the China Passenger Car Association (CPCA), Tesla sold 93,680 domestically produced cars in June, an increase of 18.72% compared to the same period last year and a growth of 20.57% month-on-month.

The layoffs this time also had an impact on Tesla’s suppliers. CATL and LG Nanjing factory are both battery cell suppliers for Tesla. Due to the decrease in Tesla’s battery orders, they have had to adjust their production plans and equipment investment as well. CATL has shifted its business focus to the energy storage sector, while LG is seeking other customers.