Tesla China has been facing issues with production in the rise of COVID-19 restrictions in the country. The restrictions have been stricter and tougher for manufacturers to get supplied from various other locations in Shanghai, China. After the Tesla factory shut down leading to the missing out on the making of 40,000 vehicles in the past three weeks, the factory is set to open again. The city is currently in a two-phase lockdown, which was initially supposed to end by April 7.
Shanghai has seen a notable rise in COVID-19 infections over the last month, and in an attempt to curb the growth, the authorities implemented some drastic lockdown measures that have been in place for weeks now. It led Tesla to have to shut down Gigafactory Shanghai on March 28. Tesla was supposed to restart production the next weekend, but it couldn’t make it work as it wasn’t able to secure enough workers and suppliers. The automaker was expected to once again attempt a restart of production during the week, but it couldn’t make it work again. The second phase of the two-phase city lockdown was supposed to end on April 7, but the authorities have extended it indefinitely amid continued spread despite the measures in place.
The reopening
It led to a lot of uncertainty about when Tesla would be able to reopen its critical factory. Recently Reuters reported that Tesla has received the go-ahead from authorities to reopen on Monday, April 18. “Tesla is preparing to resume production at its Shanghai plant on Monday following a three-week stoppage, having received the go-ahead from local authorities, two people familiar with the matter said.”
If it finally happens, it would mean that Tesla Gigafactory Shanghai would have been shut down for three weeks. At a production capacity of around 2,000 vehicles per day, Tesla will have missed out on over 40,000 vehicles. Furthermore, Tesla is expected to restart production with only one shift and gradually ramp up production. Therefore, the factory shutdown could be felt throughout the rest of the month at least.
The estimated output loss of Gigafactory Shanghai would adversely affect the company’s Q2 vehicle production and delivery results. Tesla, however, may be able to temper the effects of Giga Shanghai’s three-week shutdown — at least to a small degree — by ramping the production of the Model Y in Gigafactory Berlin and Gigafactory Texas. Both facilities are only starting their vehicle production for now.
