Tesla’s Shanghai plant, which began operations in late 2019, is the automaker’s largest manufacturing hub and builds the Model 3 and Model Y vehicles for China and exports.
The plant, which employs 20,000 workers, accounted for over half of Tesla’s global output in 2022. China is Tesla’s second-largest market after the United States by volume.
Tesla’s Gigafactory Shanghai, the first auto plant to be fully owned by a foreign company, cut output in December.
It also extended a holiday period in January in response to rising inventory before announcing price cuts of between 6% and almost 14% in China.
On February 4, an accident in the welding workshop at the Shanghai plant killed a worker, according to a report released by the local government last week.
The report said the company’s safety management contributed indirectly to the accident but the worker had direct responsibility.
Some Tesla workers were told their performance bonuses were being cut because of the accident and took to social media to protest.
Tesla promoted its China chief Tom Zhu to take oversight of its global production and sales earlier this year.
Under Zhu, the Tesla Shanghai plant managed a quick rebound from lost production last year due to COVID lockdowns in China.
During the lockdown, Zhu was among the first batch of employees sleeping in the factory as Tesla sought to sustain output at a time of sharply limited travel for workers and suppliers.
Earlier this month, Tesla announced it would open a factory outside Shanghai to build energy-storage systems that connect to the grid to store power for peak demand.
Tesla said the new plant for Megapacks would have the capacity to make 10,000 of the shipping container-sized units a year.
The company has an existing Megapack plant in California and a backlog of orders until early 2025. A single Megapack costs just under $2.7 million in California.