Tesla has scrapped plans to expand its Shanghai Model 3 factory, and will slow production in China because of US-Beijing tensions, according to a report

Tesla Shanghai
Elon Musk walks with former Shanghai Mayor Ying Yong in 2019

Tesla no longer intends to buy land to increase capacity at its Shanghai factory, Reuters reported.

Tesla also plans a general slowdown in China-based production despite soaring revenues in the country, sources familiar with the matter told Reuters.

The electric-car maker was expected to bid on a plot of land next to its Shanghai factory, but did not make a bid, the sources said. The plot was about about half the size of its current 80-hectare facility, they said.

Tesla has never publicly said it wanted to buy the plot of land. The company told Reuters its Shanghai plant was “developing as planned.”

Local media reports showed construction next to Tesla’s Shanghai plant last month.

The facility makes 450,000 Model 3 and Model Y cars every year, and with the extra space Tesla could have made an extra 200,000 vehicles, the sources said.

Tesla sells its China-made Model 3 cars in Europe, and had considered exporting to more markets including the US, sources said.

The company has now decided to slow down its China output due, in part, to an extra 25% tariff on China-made vehicles imported into the US introduced by former President Donald Trump in 2018, sources told Reuters.

The company made $3 billion in revenue in China in its first quarter, or 30% of its total revenue, but faces a potential regulatory clampdown from state authorities.

Chinese regulators met with Tesla representatives in February after a series of customer complaints about the safety of its vehicles. Since October, the automaker has recalled nearly 85,000 vehicles in China for suspension failures and problems with their touchscreen.

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The death of a 22-year-old Chinese tech employee shows the industry’s toxic ‘996’ work culture, championed by top execs like Jack Ma

SHANGHAI, CHINA - JULY 26: Pinduoduo users attend the company's listing ceremony at Shanghai Tower on July 26, 2018 in Shanghai, China. Chinese online group discounter Pinduoduo Inc. (PDD) was listed on the Nasdaq Stock Market on Thursday. (Photo by Yin Liqin/China News Service/Visual China Group via Getty Images)
Pinduoduo users attend the company’s listing ceremony at the Shanghai Tower on July 26, 2018.

  • A 22-year-old employee of Pinduoduo, a Chinese e-commerce platform, collapsed and died after leaving work at 1:30 a.m. on December 29.
  • Pinduoduo gave no official cause of death, but the woman has been hailed as the latest victim of the “996” culture fuelling China’s tech industry.
  • “996” sees staffers work from 9 a.m. to 9 p.m., six days a week, and has been praised by top executives like Alibaba founder Jack Ma and JD.com CEO Richard Liu Qiangdong.
  • Chinese tech workers have long protested the rise of the trend, but authorities have taken few steps to counter it. 
  • Visit Business Insider’s homepage for more stories.

At 1:30 a.m. on December 29, a 22-year-old woman was walking home from work on the outskirts of Urumqi, the capital city of China’s Xinjiang region, when colleagues saw her grab her stomach and fall to the sidewalk.

Paramedics spent six hours trying to revive her, but it was in vain. She died six hours later in the hospital, according to the South China Morning Post.

The woman, identified only by the last name Zhang, had been an employee of Pinduoduo, one of the largest e-commerce companies in China and the world. 

Zahng was six months into a job at Pinduoduo, and has been hailed as the latest victim of what is known as the “996” work culture plaguing China’s tech industry.

Under “996,” early-career tech employees are encouraged – and expected – to work gruelling shifts from 9 a.m. to 9 p.m., plus overtime, for six days a week.

The regimen has been praised by top Chinese executives including Alibaba founder Jack Ma and JD.com founder Richard Liu Qiangdon, but has been slammed with equal vigor by activists and employees.

Ma, who came from nothing and became China’s richest man, said in April 2019 it was a “huge blessing” to work overtime and 72-hour weeks as a young employee.

Over the weekend, a hashtag used to mark Zhang’s death and identify her as a victim of “996” had garnered millions of views on Weibo, Bloomberg reported.

In its Monday statement, Pinduoduo did not give a cause of death for Zhang, the South China Morning Post reported.

Her death is widely believed to have been caused by overwork, and the woman’s family has reportedly declined the offer of a post-mortem examination.

FILE PHOTO: People are seen at their desks at the headquarters of Chinese online group discounter Pinduoduo in Shanghai, China July 25, 2018. REUTERS/Stringer
People are seen at their desks at Pinduoduo’s headquarters in Shanghai in 2018.

‘Sacrificing our health in exchange for a paycheck’

Pinduoduo is also in hot water for comments made by one of its official online accounts earlier this week under a post about Zhang’s death, according to Shine, an affiliate of the state-owned Shanghai Daily newspaper.

“All of us grassroots people are sacrificing our health in exchange for a paycheck,” the verified Pinduoduo account commented on the web forum Zhihu.

The post was deleted shortly after, but not before it had spread on social media. 

On Sunday, Pinduoduo apologized for the post, and blamed a contractor named Li who was working for the company.

“We sincerely apologize for any inconvenience to the public and we strongly object to the views expressed in the post. This does not reflect our official stance on this heartbreaking matter,” the statement said.

The rise of “996” has been met with little official resistance in China, with authorities dragging their feet in acknowledging the problem.

However, as a result of the backlash over Zhang’s death, the Shanghai Municipal Human Resources and Social Security Bureau said it would send an investigative team to Pinduoduo to examine the company’s work practices, the Post reported.

While Zhang died in Xinjiang, Pinduoduo is headquartered in Shanghai.

jack ma
Alibaba founder Jack Ma gestures during an event in Hong Kong in November 2017.

‘996’ has long plagued China’s tech workers

A number of other Chinese tech giants have been implicated in encouraging “996.”

“We spend most of our weekends in the office,” a employee of Tencent wrote to a senior executive at the company, according to The Wall Street Journal.

“Our bodies have been in overloaded conditions for an extended period of time.”

In early 2019, Chinese tech workers protested the “996” workweek on the code-hosting site GitHub, where they outed companies, like Alibaba, that had cultures of excessive overtime.

Marlon Mai, a Shanghai-based managing director at the recruitment consultancy Morgan McKinley, told Bloomberg: “Chinese internet companies should think beyond reaching unicorn status and IPOs and a steady, healthy corporate culture is a must for long-term growth.” 

“Employee health is an issue that can’t be ignored.”

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