Beijing: Tesla’s (TSLA.O) Shanghai factory achieved the milestone of 2 million cars produced on Wednesday, according to the company’s WeChat account. That makes the plant one of the world’s most giant and productive electric vehicle factories. However, it also shows the electric car maker’s challenges as it tries to overcome production problems and political pressures.
Since opening its first gigafactory outside the United States in January 2019, Tesla has enjoyed an enviable run in China, with Beijing giving it perks other foreign companies need help to obtain. That includes tax breaks, cheap loans, and permission to own its domestic operations wholly. In return, the company has agreed to share technology with the Chinese government, which is required to operate in the country’s lucrative market.
In addition to being a central production hub, Gigafactory Shanghai also carries out important engineering work for Tesla. As a result, its employees’ well-being is a crucial issue.
The factory’s workers were recently angered by reports that their performance bonuses were being cut. Some staffers took to social media platforms to appeal to Musk and his mother, Maye, a model with a large following in the country.
Workers at the plant told Reuters they had been informed over the weekend that their quarterly bonus payouts were being deducted. Some workers were also criticizing how the company had handled the deaths of two employees in a vehicle accident at the site last year.
Despite the setback, Tesla has continued to increase its production. The plant produced more than 1 million cars in 2021 and another million this year. That included more than 330,000 Model Y vehicles, the carmaker’s fastest-selling models.
However, the company still needs to work on producing enough of its more expensive Model 3 and Y models. And China is one of many places where it faces pressure to improve quality and safety standards. Customers have reported issues with brakes and fires during charging.
A state-run Xinhua news agency report on Tuesday suggested that Tesla should address consumer hesitation before investing in China. It said the company should also respect local consumers and comply with laws and regulations to win the trust of its buyers. The Communist Party body that oversees police, prosecutors, and courts weighed in on the controversy, urging Tesla to take note of the concerns of its Chinese customers. VOA’s Paul Bergen contributed to this report. It’s been edited for clarity and length.
