Tesla sends boss and helpers from Shanghai to boost US production

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 troubleshoot production issues in the United States, the talk under Stimulating colleagues he’s being groomed for a bigger role at a time when Chief Executive Elon Musk has been sidetracked by Twitter.

Zhu, who runs Tesla’s operations in Asia, has traveled to Tesla’s plants in California and Texas with a team including Song Gang, Gigafactory manager in Shanghai, and was there just last week, according to two people with knowledge of the matter . Both asked not to be named as they were not authorized to speak to the media.

Tesla did not respond to written requests for comment from Reuters, which was sent to its media relations accounts in Shanghai and around the world. Musk did not respond to an email from Reuters asking for comments on the story. Zhu and Song could not be reached for comment.

Under Zhu, Tesla Shanghai rebounded strongly from lockdowns this year to bring Tesla close to its 2022 growth target of 50% output growth. Analysts expect production to fall just under 45% based on forecasts for the fourth quarter just ended.

Zhu and others made their first trip to the United States for Tesla in August this year, one of the people said, at a time when the company has some key management positions vacant there.

Among the projects the Shanghai team has been working on is Tesla’s long-delayed Cybertruck, the next new model, a third person said.

The Tesla Austin plant ramps up production of the Model Y and prepares the Cybertruck. The Fremont plant is preparing to launch a new version of the Model 3, which will begin production in Shanghai next year, Reuters reported.

Some Tesla investors and analysts have raised concerns about Musk’s distraction following his October acquisition of Twitter and the depth of the electric-car company’s senior management.

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

A close associate of Zhu in Shanghai has been sharing a farewell poem for the China boss on social media in recent weeks in anticipation of his new job, according to the news verified by Reuters.


At the Austin factory, Chinese engineers were seen by plant employees working in the area set aside for developing the Cybertruck and batteries, said a third person with knowledge of operations there. Tesla has targeted production of the Cybertruck for next year.

At Fremont, Calif., Chinese workers have been working on Model Y underbody assemblies, according to another person with knowledge of their work there.

When Tesla posted an image on Twitter On Friday, to celebrate Austin hitting a new production milestone of 3,000 Model Ys in a week – still less than a third of Shanghai’s weekly production last quarter – Zhu was shown smiling with hundreds of people on the factory floor.

Zhu, who was born in China but now has a New Zealand passport, is a no-nonsense executive who prefers Tesla-branded fleece jackets and lives in a government-subsidized apartment a 10-minute drive from the Shanghai Gigafactory, according to people working with him and his comments on Chinese media.

When Musk sent a memo in early June warning that he had a “super bad feeling” about the economy, Shanghai was on track to post the quarter down 36% from the quarter due to COVID lockdowns to the previous quarter, as later released data showed.

With the help of Shanghai officials, Zhu resumed operations, urging thousands of workers and suppliers to stay at the factory for more than six weeks. Zhu himself chose to stay longer and sleep at the factory, as Musk had done in 2018 when Fremont was struggling to ramp up production, two people with knowledge of the events told Reuters.

Shanghai, a complex that employs about 20,000 people, came back with a roar in the third quarter, with Model Y and Model 3 production up over 70% from the quarter.

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

The plant has distinguished itself by applying cost-saving innovations to the Tesla factory floor, including the use of massive casting machines to simplify production.

“The manufacturing workers who led this push are the obvious choice to spread the gospel of manufacturing at the other new plants,” said Sam Fiorani, who follows production trends at Auto Forecast Solutions.

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

Reuters has no evidence that Zhu is the possible candidate.

“With Elon Musk’s attention being drawn in different directions right now, it’s important to find someone to help lead Tesla, especially someone with Tom Zhu’s manufacturing expertise,” Fiorani said.

Some investors are skeptical that Zhu alone could turn things around: “Doing business in America is very different than running a factory in China,” said Ross Gerber, a Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management, on Twitter Spaces on Tuesday. “So I think Elon has to be at Tesla.”

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

Our standards: The Thomson Reuters Trust Principles.

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