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Tesla gets 14 times more labor productivity per dollar in China than the U.S.
- ferguess_k 1y agoLink to underlying research: https://research.gavekal.com/article/unraveling-chinas-productivity-paradox/ https://research.gavekal.com/article/unraveling-chinas-produ...
- ferguess_k 1y agoI actually wonder how much labor costs impacts profitability. I need to look at the financial reports. But if it (worker salary) is a small part, maybe improving the 1:2 production ratio could be more useful? Is there any reason Chinese workers are producing double the number of cars per worker? Does the Chinese super factories have better automation?
- etiennebausson 1y agoI suppose it would be way less if you only compared to U.S. prisons labor, but a race to the bottom is not to be admired.
- ferguess_k 1y agoI think if the labor cost is a small part of total cost, it might be more valuable to investigate the roughly 1:2 output per worker. Some possibilities, none confirmed: - Chinese workers work 2 shifts instead of 3 shifts, so the factory simply hires less workers. This should also show a difference of total output of cars; - Chinese factory has better processes or/and automation, which is more interesting.
- jerlam 1y agoThere might be differences between the Shanghai and California factories that muddy the comparison: - California factory was made in previous Toyota/GM factory, not sure how much of it is completely optimized compared to Shanghai factory - Shanghai factory is built much more recently (2010 vs 2019) - California factory also makes low-volume S and X vehicles in addition to 3 and Y - California (especially the area around the Tesla factory) is not representative of most US auto manufacturing, most companies including Tesla have factories in other US states
- fspeech 1y agoWhatever the reason California averages $4000 in labor cost per Tesla vs less than $300 in Shanghai. That's quite a difference.