Tesla halts production at Shanghai unit over China’s supply chain woes

Author : Pankaj Singh | Published Date : 2022-05-11 

According to an internal memo, EV major Tesla has temporarily halted most of its production at its Shanghai plant due to a lack of parts in China. The country has issued strict lockdowns as a part of its “zero COVID policy” which in turn has severely affected the nation’s supply chain and manufacturing sector.

The development comes after Tesla partially resumed production in April following a 22-day shutdown. In fact, this is the sixth week of a lockdown in China’s auto industry, which has led to uncertainties about continuing production as China battles the COVID-19 wave.

The internal memo stated that the Tesla plant would only produce around 200 vehicles, which is far fewer than the 1,200 it has been making a day since it was reopened on April 19. Tesla initially planned to increase its production to pre-lockdown levels in May, but the company is unclear about when complete operations would resume.

The China Passenger Car Association is expected to release Tesla’s April sales soon. According to an industry report, sales in China fell by almost half in April due to the country’s zero-COVID-19 policy lockdowns. The association also stated that the sales of electric cars in the country had dropped significantly.

Even Tesla’s main supplier of wire harnesses Aptiv had temporarily stopped shipping products from its facility in Shanghai after its workers got infected with the COVID-19 virus.

For those unaware, Tesla’s plant in Shanghai, known as the Gigafactory 3, is known to produce the Model 3 and Model Y crossover. The company produced around 484,130 cars from this unit back in 2021, bringing Tesla’s total China output to approximately 1 million EVs annually.

Authorities in Shanghai have already started implementing a city-wide lockdown that will last through the month, which could further affect the movement of people as well as the industrial sector.

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About Author

Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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