On May 23 Tesla added a second shift to its production, which is still under a closed-loop system as approved by local authorities. The factory is working on overcoming the shutdown of production for 22 days in March and April. So far it has been operating on a single 12-hour shift with 8,000 employees.
Now Tesla is ramping up production despite it being a closed-loop system. The factory is known to be one of the major production facilities for Tesla. With it being shut down for 22 days this year, the sales are expected to go down by many investors.
In addition to the second shift, Tesla has also overcome the logistics and supplier issues. Which was the first reason why the factory had to shut down. Earlier, they had to push back some plans to add the second shift in mid-May itself. However, as the facility utilized 95% of its production parts from local sources it is able to make things work now. The localization rate for Giga Shanghai was 90% at the end of 2021. Now, with the addition of another shift, the production is expected to speed up. Maybe recover some aspect of the lost production in March and April months.
Optimization
With a second shift and stable supply chain, Tesla is producing about 2,000 cars per day, the same as it was before the shutdown. That figure is expected to increase even further up to as many as 2,600 cars per day soon thanks to the recent $188 million production line optimization project. Even though Giga Shanghai has only been operating on a single shift, workers have been able to build enough cars for four batches of exports to Europe and other markets.
The most recent export took place earlier this week when thousands of Model 3 and Model Y were loaded onto the Horizon Leader cargo ship at the Luchao Port just outside of Shanghai.
Gigafactory Shanghai is Tesla’s primary vehicle export hub, providing Model 3 and Model Y units to territories such as Europe and other countries in Asia. Last year, the facility accounted for roughly half of the vehicles that Tesla produced and delivered. Despite the adverse effects of the recent lockdowns on the facility, however, Elon Musk noted in Tesla’s Q1 2022 earnings call that he remains optimistic about Tesla’s China-based EV plant.
“Giga Shanghai is coming back with a vengeance. So, I think notwithstanding new issues that arise, I think we will see record output per week from Giga Shanghai this quarter, albeit we are missing a couple of weeks,” Musk said.