Tesla sends Shanghai boss and helps ramp up US production

Tesla sends Shanghai boss and helps ramp up US production
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SHANGHAI/SAN FRANCISCO, Dec 21 (Reuters) – Tesla Inc. (TSLA.O) China chief Tom Zhu and a team of his reports have been brought in to deal with manufacturing problems in the US, sparking talk among colleagues that he is being groomed for a bigger role while Chief Executive Elon Musk takes a break from Twitter.

ZhuSong Gang, who heads Tesla’s Asian operations, visited Tesla’s factories in California and Texas with a team that included the manager of the Shanghai gigafactory and was there last week, according to two people with knowledge of the matter. Both did not want to be named because they were not authorized to speak to the media.

Tesla did not respond to written requests for comment sent by Reuters to its Shanghai and global media relations accounts. Musk did not respond to an email from Reuters seeking comment for the story. Zhu and Song could not be reached for comment.

Under Zhu, Tesla Shanghai has bounced back strongly from lockdowns this year to bring Tesla closer to its 2022 growth target of 50% production growth. Analysts expect output to fall by about 45% based on forecasts for the just-concluded fourth quarter.

Zhu and others made their first trip to the U.S. for Tesla in August this year, one of the people said, at a time when some of the company’s top management roles were out of place there.

Among the projects that the Shanghai team is working on are projects that Tesla has long delayed Cyber ​​truckhis next new model, third person said.

Tesla’s Austin plant is ramping up Model Y production and building the Cybertruck. The Fremont plant is about to start up New version of Model 3will start production in Shanghai next year, Reuters reports.

There are some Tesla investors and analysts expressed his concerns On Musk’s distraction and board depth at the electric car company since acquiring Twitter in October.

Bloomberg reported this month Zhu helped run the Austin plant. However, Zhu’s colleagues in Shanghai believe he is well-suited for a more senior and broader role at Tesla, the two people said.

A close aide to Zhu in Shanghai posted a farewell poem for the Chinese boss on social media in recent weeks in anticipation of his new appointment, according to a message reviewed by Reuters.


At the Austin factory, Chinese engineers were seen by people working in an area of ​​the plant dedicated to Cybertruck and battery development, a third person with knowledge of operations there said. Tesla has targeted Cybertruck production next year.

Chinese workers in Fremont California are working on Model Y subs, according to another person familiar with their work there.

When Tesla posted a photo on Twitter On Friday, to celebrate Austin reaching a new milestone of producing 3,000 Model Ys a week — still less than a third of Shanghai’s weekly output last quarter — Zhu was shown smiling with hundreds of people on the factory floor.

Zhu, who was born in China but now holds a New Zealand passport, is a no-fuss executive who favors Tesla woolen jackets and lives in a government-subsidized apartment a 10-minute drive from the Shanghai Gigafactory. working with him and his comments to the Chinese media.

When Musk sent a warning letter in early June, he had some news “super bad feeling” On the economy, Shanghai was on track to end the quarter 36% lower than the previous quarter due to the COVID lockdown, data released later.

With the help of Shanghai officials, Zhu resumed operations by asking thousands of workers and suppliers to stay at the factory for more than six weeks. Zhu himself, like Musk, chose to sleep at the factory in 2018 as Fremont struggled to ramp up production, two people with knowledge of the matter told Reuters.

The Shanghai complex, which employs about 20,000 workers, rebounded in the third quarter, with Model Y and Model 3 production up more than 70% in the quarter.

By September, Shanghai supplied more than half of Tesla’s production.

The factory excelled in implementing cost-effective, factory-floor innovations for Tesla, including the use of mass casting machines to streamline production.

“Manufacturers leading this push are an obvious choice to spread the manufacturing gospel to other new plants,” said Sam Fiorani, who tracks manufacturing trends at Auto Forecast Solutions.

Tesla board member James Murdoch said last month that the company had identified a potential successor to Musk, without naming him. Murdoch did not immediately respond to a request for comment.

Reuters has no evidence that Zhu is a possible candidate.

“With Elon Musk’s focus now in several directions, it’s important to find someone to help lead Tesla, especially someone with Tom Zhu’s manufacturing experience,” Fiorani said.

Some investors are skeptical that Zhu alone can change things: “Doing business in America is very, very different from running a factory in China,” Ross Gerber, a Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management, said on Twitter Spaces on Tuesday. “That’s why I think Elon should be at Tesla.”

Reporting by Zhang Yan in Shanghai and Hyunjoo Jin in San Francisco; Edited by Kevin Krolicki and Daniel Flynn

Our standards: Thomson Reuters Trust Principles.

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