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Tesla Will Reportedly Slow Down Production at Shanghai Plant

Other reports have shown the EV maker had planned to pause work at its main production plant, but that will extend further into 2023.

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A large building with the Tesla Logo on the side and an empty street in front.
The Tesla production plant in Shanghai, China will be scaling back production this month and in January.
Photo: Xiaolu Chu (Getty Images)

The most prolific electric vehicle brand in the world, headed by one of the world’s most prolific tweeters, has a new year’s resolution for 2023. According to a report based on leaked internal schedules, Tesla wants to cut back a bit on its vehicle production for January out of its main China production plant. It will be interesting to see if the company keeps up their resolution after the 2023 starting gun, or if it will fall back into its old ways.

According to a report from Reuters, Tesla’s leaked internal production schedule shows the company will have production run from Jan. 3 to Jan. 19 but then cut production from Jan. 20 to Jan. 31. The break is concurrent with Chinese New Year, which runs from Jan. 21 to 27, though notably this is the first time the company has made any concession for the holiday. It also follows after Tesla paused operations at the plant starting Dec. 24 until Jan. 1, which Reuters reported based on another internal notice.

The plant in Shanghai, China produced half of the company’s Tesla cars in the first half of 2022, so a production freeze could easily be interpreted as a bad sign. The company has promised 50% growth in output year-to-year, but analysts think that will only amount to a bare 45%, according to Reuters.

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The factory employs around 20,000 total staff. It’s unclear if workers will be getting paid for the time they are off the line. The Shanghai factory has been cited for its working conditions, including 12-hour shifts, six days a week. The factory itself had reportedly forced workers to live and sleep at the factory earlier this year due to covid lockdowns.

And noting how Tesla CEO Elon Musk has previously claimed its other factories in Texas and Germany are “money furnaces” all while blaming supply chain issues, the cutbacks in Shanghai going into 2023 do not indicate the electric vehicle company expects much to change in the new year. Musk runs notoriously slim operations among his other companies such as SpaceX, which one former employee recently called “scrappy” despite it being a multi-billion dollar operation. The CEO’s focus on cost-cutting was noted even back in 2021.

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Gizmodo reached out to Tesla for comment, but like all companies owned by CEO Elon Musk, the EV maker lacks a communications department and did not respond to our email. The company’s fourth quarter report will only be available late into January.

In any case, the company has been having a rough time of it the past few months. Separate reports citing unnamed sources noted Tesla was implementing a hiring freeze and was laying off staff. The news followed hiring pauses back in June amid a bearish sense about the entire global economy as a whole. Tesla also saw a decline in profits for the first time in over a year this past July.

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China itself has been experiencing a wave of new covid infections since the country flipped the switch on its obtuse “zero covid” policy. It was an effort to placate the massive, anti-government protests spreading across the country, but this has now led to reports of overwhelmed hospitals whose medical staff can barely handle the number of new incoming patients.

Musk himself has been distracted from his job as the head of Tesla due to his ongoing role as the head of Twitter. The billionaire’s $44 billion purchase of the platform has left some analysts openly concerned about whether the man in charge can possibly be committed to his old automaker since he sold $3.6 billion-worth of Tesla shares earlier this month. Some analysts have speculated the money could go to patching holes in the Twitter buyout. Musk has sold $23 billion worth of his Tesla shares since the start of the year, according to filings from the Securities and Exchange Commission. This was even after he promised to stop selling shares to help finance the Twitter deal. In the meantime, Tesla’s stock price is limping along, and on Tuesday it fell below $120 a share.