Tesla Boosts Pay for US Factory Workers to Keep Unions at Bay

Production workers will get a wage increase that curiously follows a strong year for the autoworkers’ union.

Photo of Tesla CEO Elon Musk
Photo by Ministry of Communications of Brazil via CC BY 2.0

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Worker advocates, collective bargaining rights, job security — who needs all that when you’re getting a salary bump?

In a flyer posted at one of its California facilities, Tesla announced that its US factory workers will get more money in their paychecks this year, Bloomberg reported. Also, in we’re-sure-totally-unrelated news, the United Auto Workers is ramping up efforts to unionize the electric-vehicle giant.


After a six-week protest, the UAW made historic wins in contract negotiations at the end of last year with the Big Three US car manufacturers — Ford, General Motors, and Stellantis. The latest deals shortened the time it takes for new employees to reach senior pay, installed wage increases across the board, and guaranteed workers’ right to strike over future plant closures. The UAW wants to keep the momentum going as it tries yet again to unionize Tesla and dozens of other non-union manufacturers.

But the union also faces the whims of Tesla CEO Elon Musk, who once plainly said he doesn’t like unions or any groups that he thinks create a “lords and peasants sort of thing:”

  • Documents reviewed by Bloomberg said all US production associates, material handlers and quality inspectors at Tesla would get an unspecified “market adjustment pay increase.”
  • The move is similar to that of other carmakers. Hyundai plans to boost factory worker pay 25% by 2028, Volkswagen raised worker pay at its assembly plant in Chattanooga, Tennessee, by 11% in December, and Toyota bumped top factory worker pay this month to $34.80 per hour.

Smaller Bet on EVs: Tesla had a hectic 2023 due to its price-cutting war with rivals like Ford and Rivian, but all the slashing allowed it to sell a whopping 1.8 million vehicles. However, the overwhelming majority of drivers have yet to make the move to electric, and those within the industry are walking back some of their EV pushes. Car rental service Hertz announced on Thursday that it was selling off a third — or roughly 20,000 vehicles — of its EV fleet and putting some of the proceeds toward combustion engine cars. The move comes just three years after purchasing 100,000 vehicles from Tesla. Musk might have to hold firm on those price cuts for a bit longer.