Tesla halts most production in Shanghai over supply problems

Tesla has halted most of its production at its Shanghai plant because of problems securing parts for its electric vehicles, according to an internal memo seen by Reuters, the latest in a series of difficulties for the factory.

The plant plans to manufacture fewer than 200 vehicles on Tuesday, according to the memo, far fewer than the roughly 1,200 units it has been building each day since shortly after it reopened on 19 April after a 22-day closure.

Two sources familiar with the matter had earlier said supply problems had forced the factory to halt production on Monday. Shanghai is in its sixth week of an intensifying Covid-19 lockdown that has tested the ability of manufacturers to operate amid hard restrictions on the movement of people and materials.

Tesla had planned as late as last week to increase output to pre-lockdown levels by next week. It was not immediately clear when the current supply issues would be resolved, said the sources, who asked not to be identified because the production plans are private. Tesla did not immediately respond to a query for comment.

China Passenger Car Association is scheduled to release April sales for Tesla, China’s second-largest EV maker behind BYD, on Tuesday. Another automotive association said last week it estimated overall sales in China dropped 48% in April as zero-Covid lockdowns shut factories, limited traffic to showrooms and put the brakes on spending.

Aptiv, Tesla‘s main supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla and General Motors after Covid-19 infections were found among its workers, two people familiar with the matter told Reuters.

Tesla’s Shanghai plant, also known as the Gigafactory 3, produces the Model 3 sedan and Model Y crossover for the China market and for export. Tesla partially resumed production at the Shanghai plant on 19 April after a 22-day closure caused by the city’s Covid-19 lockdown.

Tesla had been aiming to increase output at its Shanghai plant to 2,600 cars a day from 16 May, Reuters reported previously.

Shanghai authorities have tightened a city-wide lockdown imposed more than a month ago on the commercial hub with a population of 25 million, a move that could extend curbs on movement through the month.

News of the production issues came on same day Tesla announced the recall of 130,000 vehicles in the US over an overheating issue that may cause the center touchscreen display to malfunction.

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