Tesla blasts ‘ridiculously fabricated’ report raising quality concerns at Shanghai plant

Published (HKT): 2021.01.01 05:30

Tesla says it will sue a mainland Chinese news site after a report accusing the maker of luxury electric autos of running a sweatshop in Shanghai where corner-cutting has damaged quality and risked safety.

Tesla signed an agreement with the Shanghai government in July 2017 to launch a “Gigafactory,” where the first batch of its electric cars were manufactured in Dec. 2019. Model 3 cars produced in the city started being exported to Europe in October this year.

However, a report published last week by Chinese tech news site PingWest accused Tesla of running a “Giga-Sweatshop.”

Tesla China Vice President Grace Tao blasted the report as “ridiculously fabricated,” adding in the post on China’s Twitter-like Weibo, that the company was planning to sue PingWest.

There were numerous cases of defective parts that “miraculously disappeared,” PingWest cited an employee in the warehouse and logistics department as saying.

Tesla abandoned its logistics system due to high costs and this affected accuracy and quality control of defective parts, according to the report. There was at least one instance that defective parts were loaded onto production vehicles, PingWest cited one of its sources saying.

Pressure to meet the high volume of Tesla’s production led to more defective parts entering the supply chain, the report said, citing a supplier. The solution was to lower the standard for passing quality checks, a staffer told PingWest.

The report alleged that the head of Tesla China’s after-sales department, Xue Juncheng, told a weekly staff meeting: “We’re not going to recall. Instead, we can change [parts] secretly when we find such problems in vehicles brought in for service.”

The Shanghai plant produced 22,900 Tesla cars in October this year. It took Beijing Benz Automotive 10 years to reach a monthly production of more than 20,000.

Workers at Tesla’s Shanghai factory told PingWest that many of them had quit with others having to do extra and extended shifts. Benefits have been rapidly shrinking: Snacks were no longer available, while those working later than 8.30 p.m. were given only instant noodles, the report claimed. The company had even provided bread that was past its sell-by date, it said.

The only thing that had kept workers happy was Tesla’s ever-rising share price, PingWest said. Tesla China promised all employees stock on a 1-year lock-up period, but that offer was rescinded in May this year, the report said.

There have been several reports of accidents in China relating to Tesla cars that suddenly accelerated on their own. A Tesla Model 3 car bought in October crashed into a hotel lobby in Hangzhou on Thursday. Similar incidents occured in Beijing this month, as well as in Wenzhou and Shanghai in August.

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