Tesla sends Shanghai chief and advisers to boost US production

TECHNOLOGY
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SHANGHAI/SAN FRANCISCO, Dec 21 (Reuters) – Tesla Inc (TSLA.O) China chief Tom Zhu and a team of his subordinates have been brought in to troubleshoot production issues in the United States, fueling conversations between colleagues for the which he is being groomed for a bigger role at a time when Chief Executive Elon Musk is distracted by Twitter.

Zhu, who heads Tesla’s Asia operations, has been traveling with a team that includes Shanghai gigafactory manager Song Gang to Tesla’s factories in California and Texas, where he worked last week, according to two people with knowledge. of the subject. Both asked not to be identified because they were not authorized to speak to the media.

Tesla did not respond to Reuters written requests for comment sent to its Shanghai and global media relations accounts. Musk did not respond to a Reuters email 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% output growth. Analysts expect output to fall short of 45% based on forecasts for the fourth quarter now ending.

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

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

Tesla’s Austin factory is ramping up Model Y production and preparing the Cybertruck. The Fremont factory is preparing to launch a new version of the Model 3, which will start production in Shanghai next year, Reuters reported.

Some Tesla investors and analysts have expressed concern over Musk’s distraction following the October acquisition of Twitter and the depth of the electric car company’s executive bench.

Bloomberg reported this month that Zhu was helping run the Austin plant. However, Zhu’s colleagues in Shanghai believe he is in line for a more senior and far-reaching role at Tesla, the two people said.

A close aide to Zhu in Shanghai has circulated a farewell poem for China’s chief in recent weeks on social media in anticipation of his new assignment, according to the message analyzed by Reuters.

SHANGHAI TEAM ON THE ROAD

At the Austin factory, Chinese engineers were seen by plant people working in the area set aside for Cybertruck and battery development, said a third person with knowledge of operations at the site. Tesla is targeting Cybertruck production next year.

In Fremont, Calif., the Chinese team is working on the Model Y’s bottom mounts, according to another person with knowledge of 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 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 an uncomplicated manager who prefers Tesla-brand woolen jackets and lives in a government-subsidized apartment a 10-minute drive from the Shanghai Gigafactory, according to people who working with him and his comments to the Chinese media.

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

With help from Shanghai officials, Zhu restarted operations by asking thousands of workers and suppliers to remain at the factory for more than six weeks. Zhu himself opted to stay longer, sleeping at the factory as Musk did in 2018 when Fremont was struggling to ramp up production, two people with knowledge of the events told Reuters.

Shanghai, a complex that employs around 20,000 workers, made a comeback in the third quarter, with Model Y and Model 3 production growing by more than 70% in the quarter.

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

The factory excelled in applying cost-saving shop floor innovations for Tesla, including the use of massive casting machines to streamline production.

“The people in manufacturing who have spearheaded this push are obvious choices 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 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 a possible candidate.

“With Elon Musk’s attention currently being pulled in multiple directions, it’s important to find someone to help guide Tesla, especially someone with the manufacturing know-how that Tom Zhu possesses,” said Fiorani.

Some investors are skeptical that Zhu alone could change things: “Doing business in America is very, very different from running a factory in China,” Ross Gerber, Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management, said on Twitter. Spaces on Tuesday. “So I think Elon needs 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: Thomson Reuters Trust Principles.

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