Tesla Inc. cuts battery production workforce in Shanghai amid fierce price war in China, suggests report

Tesla Inc. has reportedly initiated layoffs of a portion of its battery production workers at its Shanghai plant, according to individuals familiar with the situation. This move comes in the midst of a challenging price war in China, where manufacturers are engaging in aggressive car discounts across the industry.

According to Bloomberg, Tesla Inc. has commenced the notification process for layoffs among employees working on the cell assembly lines of the initial phase of its factory in China's financial hub. The US electric car manufacturer took this step earlier in the week as part of its restructuring efforts.

As per the report, a portion of the affected staff has been presented with the opportunity to transfer to alternative workshops, such as stamping, painting, or general assembly, within the company. The exact number of battery workers facing layoffs and the specific reasons for the workforce reduction remain unclear at this time.

Tesla's Shanghai factory, which has the capability to produce approximately 1 million cars annually, currently employs around 20,000 personnel. Although Tesla sources batteries from LG Energy Solution Ltd. and Contemporary Amperex Technology Co. Ltd., the integration of these batteries into modules and packs is carried out at the company's battery workshop prior to installation in vehicles. 

The report from Bloomberg further suggests that the development and construction of automation equipment that could potentially replace human labor on the battery production line are currently underway.

Tesla, headquartered in Austin, Texas, is currently experiencing significant momentum both in China and internationally.

In June, deliveries from its Shanghai facility surged by nearly 20 per cent compared to the previous year, reaching an impressive 93,680 vehicles. This notable increase suggests a potential reduction in the disruption caused by the intense price competition prevalent in the market.

Furthermore, Tesla achieved a record-breaking global car delivery figure in the second quarter, surpassing Wall Street estimates with a remarkable 466,140 cars delivered. This achievement underscores the company's strong performance on a global scale.

(With inputs from Bloomberg)