Elon Musk dispatches Tesla’s ‘fireman’ to China amid slowing sales

A Tesla showroom in Beijing last year. (Reuters)
A Tesla showroom in Beijing last year. (Reuters)

Summary

Tom Zhu, one of the three executives named on Tesla’s website, is coming back to China as the carmaker seeks to launch Autopilot features there.

SINGAPORE–When Elon Musk made a surprise visit last month to Beijing, the Tesla chief executive brought along a trusted lieutenant: Tom Zhu, the company’s former China head who had skyrocketed through the ranks as a turnaround guru.

Now, Zhu—one of just three senior executives including Musk currently named on Tesla’s website—is getting deployed from Tesla’s Texas headquarters back to China at a vulnerable time for the world’s most valuable automaker, according to a person familiar with the matter.

Zhu, who was born in China and educated in the U.S. and New Zealand, had last year been promoted to Tesla’s global leadership team in Austin, where he shouldered some CEO duties as Musk split his time elsewhere. Zhu is credited with turning Tesla’s Shanghai factory into one of the company’s standout performers. Some employees refer to Zhu internally as the “fireman" due to his ability to troubleshoot issues and hit high targets.

Zhu’s move comes as the carmaker is trying to fix its struggling business in the world’s biggest electric-vehicle market. China is expected to play an essential role as Musk seeks to reignite Tesla’s sagging growth globally.

In China, where many carmakers including Tesla’s rival BYD are fighting fiercely for share in the highly competitive EV market, overall sales of electric cars grew 15% in the first quarter from a year ago. Tesla’s sales slipped 4%.

Tesla and Zhu didn’t immediately reply to requests for comment. EV industry news website Electrek previously reported Zhu’s new role.

Zhu joined Tesla in 2014 and nine months later started taking leadership roles for the company’s China operations. He threaded a needle with Chinese officials and helped Tesla quickly build up its Shanghai plant.

Staff in China describe Zhu as a workaholic and said he gives feedback instantly. When Shanghai went through Covid lockdowns in early 2022, Zhu was sleeping at the factory there with Tesla workers and suppliers to keep the operation running. Zhu has also shepherded important projects including the Cybertruck and helped ramp up capacity and smooth manufacturing processes at Tesla’s plants in Austin and Fremont, Calif.

Last month, Zhu and Musk met Chinese Premier Li Qiang and other top government officials. The two won Beijing’s blessings on launching in the country its “Full Self-Driving," or FSD, software feature, The Wall Street Journal has reported.

Tesla is set to implement its new partnership with Chinese tech company Baidu to deploy its FSD features that build on Baidu’s mapping and navigation functions. Musk is seeking to expand the use of the technology, an anchor to rekindle Tesla’s growth.

The EV maker is also trying to push ahead with the discussions with Chinese authorities about transferring data that Tesla’s cars gathered in China to the U.S. The company would need to convince Beijing that the practice wouldn’t undermine China’s national security.

Tesla’s losing ground in China has been unsettling for investors. Many local competitors already offer similar but lower-cost autopilot features as well as multiple car models and have deeply cut prices, eating into Tesla’s market share. Meanwhile, Tesla is largely stuck with two aging vehicles—the locally-produced Model 3 and the Model Y.

Tesla is cutting more than 10% of its global workforce. Over the past few weeks, the company has lost several senior executives including Drew Baglino, the head of powertrain and energy engineering, and Rohan Patel, who oversaw policy and business development. It also axed almost its entire Supercharger team.

In China, Tesla has let go of employees in the marketing and sales teams, production workers as well as interns and fresh graduates who were expected to join the company this summer, said people familiar with the matter and those who were laid off.

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