China’s manufacturing edge over other countries is not solely due to economies of scale or technological advancements but stems from exploiting labor within a repressive system, as per a report. The Diplomat article underscores that China’s advantage lies in a labor system that reduces costs through lenient enforcement, long work hours, and wage suppression, creating a cost disparity based on labor treatment rather than productivity.
Drawing a comparison, the article cites Tesla’s production data from factories in the US and Shanghai to illustrate this point. In 2023, Tesla’s Fremont facility in California, with 20,000 employees, manufactured approximately 560,000 vehicles, translating to about 28 vehicles per worker annually. In contrast, Tesla’s Shanghai Gigafactory, with a similar workforce, produced nearly 1 million vehicles, averaging close to 50 vehicles per worker each year.
Tesla’s Gigafactory in Shanghai achieved a significant milestone by rolling out its 4 millionth vehicle on December 8, 2024, signifying the company’s growth alongside China’s expanding new energy sector. The Shanghai plant, Tesla’s inaugural gigafactory outside the US, commenced construction in January 2019 and delivered its first vehicle later that year, now producing a new car approximately every 30 seconds and accounting for nearly half of Tesla’s global electric vehicle shipments.
The plant’s production journey saw the first 1 million vehicles take over 30 months to manufacture, while the subsequent million from 3 to 4 million was accomplished in about 14 months, highlighting accelerated output. Serving both the domestic Chinese market and international buyers, the Shanghai facility exports vehicles to Europe and the Asia-Pacific region, with a notable milestone in October when it shipped over 35,000 vehicles abroad, marking the highest monthly export volume in two years.
In February, Tesla inaugurated its new Megafactory in Shanghai dedicated to energy-storage battery production, marking its second major facility in Shanghai and the first of its kind beyond US borders, as reported by Chinese news agency Xinhua.
