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Tesla Faces Shortage of EV Parts, Halts Production in Shanghai

The halt in production is the latest in a series of difficulties the factory faces as Shanghai enters a sixth week of lockdowns


Tesla electric vehicles in Shanghai
Tesla may be one of the companies that benefits if the Chinese government extends its subsidies for EVs for another year. Photo: Tesla.

 

A shortage of electric vehicle parts has forced Tesla to halt production at its Shanghai plant, two people familiar with the development said.

The car maker was expected to produce less than 200 cars on Tuesday – less than a tenth of its normal output.

The suspension of production is the latest in a series of difficulties the factory faces as Shanghai enters a sixth week of lockdowns.

Tesla had planned as late as last week to increase output to pre-lockdown levels by next week. It did not immediately respond to a query for comment.

It was not immediately clear when the current supply issues can be resolved and when Tesla would be able to resume production, said the people, who asked not to be identified because the production plans are private.

 

 

ALSO SEE: China Stocks Plunge as Xi Doubles Down on Covid Strategy

 

 

Supplier Hit by Covid

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 said on Monday.

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 April 19 following a 22-day closure caused by the city’s Covid-19 lockdown. The group had been aiming to increase output at its Shanghai plant to 2,600 cars a day from May 16.

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.

 

Car Sales Plunge

Meanwhile, passenger car sales in China fell 35.7% in April, data from the China Passenger Car Association (CPCA) showed on Tuesday, as efforts to combat Covid in the world’s largest vehicle market shut factories, impacted logistics and sapped demand.

It was the biggest monthly drop since March 2020, the height of country’s initial coronavirus outbreak, when sales fell 40% year-on-year, CPCA said.

Tesla produced 10,757 China-made vehicles in April and sold 1,512 of these, the fewest since April 2020 and compared with the 65,814 cars it sold in March this year.

Production of, and demand for, luxury cars was also badly hit, with sales falling 54%, CPCA said.

Sales of new energy vehicles, in comparison, rose 50.1% year on year as customers rushed to place orders, anticipating that automakers may raise prices. BYD in particular saw strong sales, CPCA added.

China’s zero-Covid policies have disrupted entire supply chains with analysts at Nomura estimating in mid-April that 45 cities, representing 40% of the country’s GDP, were under full or partial lockdowns.

 

  • Reuters with additional editing by Jim Pollard

This report was updated on May 10, 2022 with details on China car sales data from April.

 

 

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Tesla Shanghai at Over 80% of Normal Output – InsideEVs

 

Tesla Hopes to Boost Shanghai Plant Production by Mid-May

 

Tesla to Run Two Shifts in Shanghai to Make Up Lost Time

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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