Tesla sends boss and assistants from Shanghai to boost US production

SHANGHAI/SAN FRANCISCO, Dec 21 (Reuters) – Tesla Inc. (TSLA.O) China chief Tom Zhu and a team from his reports have been brought in to fix production problems in the United States, fueling conversation among colleagues that he is being groomed for a bigger role at a time when Chief Executive Elon Musk has been distracted by Twitter.

Zhu, who heads Tesla’s Asian operations, has been traveling with a team that includes Shanghai gigafactory manager Song Gang to Tesla’s plants in California and Texas, where he was working last week, according to two people. with knowledge of the matter. Both asked not to be named 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 an email from Reuters seeking comment for the story. Zhu and Song could not be reached for comment.

Under Zhu, Tesla Shanghai rebounded strongly from lockdowns this year to move Tesla closer to its 2022 growth target of 50% production growth. Analysts expect production to remain close to 45%, according to forecasts for the fourth quarter that has just ended.

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 positions open there.

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

Tesla’s Austin plant is increasing production of the Model Y and preparing 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 takeover of Twitter and executive bank depth at the electric car company.

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 higher and more far-reaching position at Tesla, the two people said.

A close Zhu aide in Shanghai has circulated a farewell poem to the Chinese chief in recent weeks on social media, anticipating his new assignment, according to the message reviewed by Reuters.

THE SHANGHAI TEAM ON THE ROAD

At the Austin factory, the Chinese engineers were seen by people at the plant who worked in the area reserved for development of the Cybertruck and batteries, a third person with knowledge of operations there said. Tesla has targeted production of the Cybertruck next year.

In Fremont California, Chinese personnel have been working on the Model Y underbody assemblies, 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 production milestone of 3,000 Model Ys in one week, still less than a third of Shanghai’s last quarter’s weekly output, Zhu was shown smiling with hundreds of people on the production floor.

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

When Musk sent out 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 due to COVID lockdowns, data showed. posted later.

With the help of Shanghai officials, Zhu restarted operations by asking thousands of workers and suppliers to stay at the factory for more than six weeks. Zhu himself chose to stay longer, sleeping 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 resort that employs some 20,000 workers, came back strong in the third quarter, with Model Y and Model 3 production up more than 70% in the quarter.

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

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

“The manufacturing people who led that push are obvious choices to spread the production gospel to the other new plants,” said Sam Fiorani, who tracks production trends for Auto Forecast Solutions.

Tesla board member James Murdoch said last month that the company had recently identified a possible 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 currently turning in multiple directions, it’s important to find someone to help guide Tesla, especially someone with Tom Zhu’s manufacturing knowledge,” Fiorani said.

Some investors are skeptical that Zhu alone can turn things around: “In the United States, doing business is very, 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 needs to be at Tesla.”

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

Our standards: The Thomson Reuters Trust Principles.

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