Monday, June 27, 2022

Tesla stops production at Shanghai factory This is why?

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Shreya Christina
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The latest in a series of setbacks for Tesla’s Shanghai factory is the company’s inability to secure parts for its electric vehicles, according to an internal memo seen by Reuters.

According to the memo, the factory plans to make fewer than 200 cars on Tuesday. This is far less than the 1,200 cars it makes every day since it reopened on April 19 after being closed for 22 days.

Two people who were aware of the situation previously said the factory had to stop production on Monday due to supply problems.

Shanghai is in the sixth week of a Covid-19 lockdown that is getting worse. This has tested the ability of manufacturers to operate when people and materials cannot move freely.

Tesla last week planned to bring production back to where it was before the lockdown next week.

People who asked not to be named because the production plans are private said it was not clear when the current supply issues would be resolved.

When asked for a comment, Tesla didn’t answer right away.

China Passenger Car Association will report Tesla’s April sales on Tuesday. Tesla is the second largest electric vehicle (EV) manufacturer in China after BYD.

Last week, another auto association said it thought total car sales in China fell 48 percent in April as zero-Covid lockdowns closed factories, reduced traffic to showrooms and slowed spending.

Two people with knowledge of the situation told Reuters on Monday that Aptiv, Tesla’s main supplier of wiring harnesses, stopped shipping from a factory in Shanghai that supplies both Tesla and General Motors Co after it was found that workers there had Covid-19 infections.

The Gigafactory 3 is the name of Tesla’s factory in Shanghai, where the Model 3 sedan and Model Y crossover are made for the Chinese market and for export.

After being closed for 22 days due to the Covid-19 lockdown in Shanghai, Tesla’s factory there started making some cars again on April 19.

Reuters said Tesla planned to start making 2,600 cars a day at its factory in Shanghai by May 16.

The citywide lockdown of Shanghai, which was put in place more than a month ago and affects all 25 million people, has been tightened. This can make it harder for people to move for the rest of the month.

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