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Tesla Hopes to Boost Shanghai Plant Production by Mid-May

Internal memo outlines plans to add more shifts to boost production to pre-lockdown levels even as suppliers struggle to provide parts.


Tesla resumes Shanghai production
Photo: Reuters.

 

Tesla hopes to return production at its Shanghai plant to pre-lockdown levels of 2,600 cars a day by May 16, the company said in an internal memo.

Tesla is able to operate only one shift at the plant, but plans to add more shifts in the coming weeks, potentially increasing weekly production to 16,900 vehicles based on Tesla’s established work week at the facility – about the same level as before March lockdowns closed the plant.

Tesla declined to provide immediate comment.

Tesla ran three shifts at the Shanghai plant before the lockdown, making Tesla’s Model 3 and Model Y. The plant reopened on April 19 after a 22-day closure, its longest since the site opened in late 2019.

The Shanghai lockdown has also been challenging for Tesla and other manufacturers because of the complication of getting parts from suppliers.

In one example, Aptiv, which supplies wire harnesses for Tesla, was not able to resume production in mid-April, but in this case Tesla managed to secure wire harnesses from other suppliers and Aptiv received approval from authorities to resume production at the end of April.

The disruption to Tesla’s Shanghai plant has been one of the highest profile consequences of China’s measures to control its biggest Covid-19 outbreak, which have also crimped consumption, including vehicle sales.

Sales of electric vehicles (EVs) had been booming in China before the lockdowns. Tesla sales in China jumped 56% in the first quarter, while EV sales by its larger rival in China, BYD, increased fivefold.

Tesla assembled 55,462 vehicles in March at its Shanghai plant when it paused production for six days in the month, data from the China Passenger Car Association show.

The reopening of its Shanghai factory was heavily publicised by state media and was undertaken with the support of authorities who helped Tesla transport more than 6,000 workers and carry out disinfection work, Reuters reported this week.

Tesla’s progress, however, comes as a survey showed that Japanese companies are struggling to reopen factories in Shanghai, indicating difficulties with the municipal government’s push to help key businesses get back to work.

The Shanghai Japanese Commerce and Industry Club said on Thursday that of 54 companies that responded to an April 27-30 survey, 63% said their factories had yet to resume operations.

  • Reuters, with editing by Neal McGrath

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.

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