Tesla Giga Shanghai’s production pace is picking up with 80% of manufacturing being resumed. The production resume comes after the factory had to shut down for two weeks because of COVID-19 restrictions. As the cases have been increasing throughout the locality, the automaker had to comply with the restrictions in Shanghai.
Other companies that supply components to automakers have also restored production by 80-90%, which is good news for the entire industry.
Companies that made it to Shanghai’s first “whitelist” have resumed more than 80% of their production. Key businesses such as Tesla are reported to be actively rolling out vehicles from production lines and continue to pick up the pace. The production facilities of major semiconductor manufacturers SMIC and Hua Hong Semiconductor actually support more than 90% of pre-lockdown level production, an official said Saturday, according to the Global Times.
Tesla welcomed about 8,000 workers back to Giga Shanghai by April 19 after subsequent lockdowns due to Covid outbreaks. At the time, Giga Shanghai’s Senior Director of manufacturing Song Gang publicly stated that battery and motor production was “already producing at full speed.” Tesla was one of 666 companies out of about 50,000 registered in Shanghai that was on the “whitelist.” The list includes mainly companies in the automotive, semiconductor, and energy industries.
Production during restrictions
During the last TSLA earnings call, CFO Zachary Kirkhorn mentioned Giga Shanghai’s lockdowns in his opening remarks. He noted that Tesla lost about a month of build volume due to the shutdowns. Kirkhorn told investors that the Shanghai lockdowns might affect Tesla’s total build and volume numbers in the second quarter. However, he added that the company was working to get back to full production “as quickly as possible.” The EV manufacturer adopted a closed-loop system to resume operations, including temporarily housing employees within the gigafactory’s complex. By April 22, 2022, Elon Musk mentioned that Giga Shanghai was “coming back with a vengeance.”
Furthermore, during the Q1 2022 earnings call, Musk estimated that Tesla’s Q2 build and delivery numbers might be more or less than they did. Earlier, in the first quarter as Shanghai ramps back up to full production. Tesla produced 305,407 and delivered 310,048 vehicles in the first quarter. However, Musk was optimistic that Shanghai’s build and delivery volume would significantly increase by Q3 and Q4.
“A large-scale carmaker like Tesla is supposed to have an inventory for at least two weeks of production when it is in normal operation. It will be some time before Shanghai-based carmakers like Tesla, Volkswagen, and General Motors can fully restore their supply chain and run at full capacity,” Zhang noted earlier when Tesla adopted the closed-loop system.
