Tesla to raise pay for hourly Nevada Gigafactory workers in January — move could stave off union interest

Tesla has informed workers at its battery factory in Sparks, Nevada, that some set-rate hourly workers there will see pay increases around 10% starting in early January 2024.

According to internal materials seen by CNBC, and workers at the plant who were informed of “cost of living adjustments,” Tesla will bump hourly workers from $20 to $22 an hour on the low end, and from $30.65 up to $34.50 an hour on the high end. It’s also streamlining some levels, so that several levels of worker making between $26.20 and $30.65 an hour today will be adjusted to $34.50 an hour, for instance.

The adjustments also represent a 10% or greater raise for most hourly workers, adding anywhere from $2 to $8.30 an hour to their pay.

The pay increases may help Tesla stave off workers’ interest in forming a union and pushing for a collective agreement in Nevada. Tesla did not immediately respond to a request for comment on the raises.

The United Auto Workers won record contracts after contentious negotiations and U.S. labor strikes with General Motors, Ford Motor and Chrysler-parent Stellantis earlier this year. As CNBC previously reported, UAW President Shawn Fain repeatedly said he plans to take that fight from Detroit automakers to Tesla, Toyota Motor and other non-unionized automakers operating in the U.S.

In late October, workers at Tesla service and collision repair centers in Sweden touched off a labor strike that has now spread to Denmark, Finland and Norway and includes workers involved in shipping, waste management and providing other services to Tesla. In recent weeks, one of Denmark’s largest pension funds announced that it would sell its holdings of Tesla stock over the U.S. giant’s refusal to enter into agreements with labor unions.

The EV maker’s promise of a significant cost of living adjustment for workers at the Nevada Gigafactory also comes as Tesla faces increased competition for talent, and as CEO Elon Musk touches off one controversy after another via public speaking engagements and posts on X, formerly Twitter, the social media platform he acquired late last year.