US automaker Tesla stopped production at its Shanghai Gigafactory on Saturday, accelerating a prior plan to halt the majority of activity at the plant in the final week of December.
The EV-maker cancelled the morning shift and notified everyone at its busiest manufacturing facility that they could begin their break, according to an internal notification and two people with knowledge of the situation. Tesla did not give a reason.
It has not been a standard norm for factory plant to shut down for a year-end holiday.
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The suspension comes amid a rising wave of infections after China abruptly eased its zero-Covid policy earlier this month. The move was welcomed by businesses and the public but has heavily disrupted business operations in the short term.
One of the people said workers at Tesla and its suppliers have also been falling sick as part of this wave, posing challenges to operations in the past week.
Tesla is also grappling with elevated inventory levels as its second largest market braces for a downturn.
The Shanghai plant has been focused on making models for export in the last week, the person added.
The plant’s suspension of Model Y assembly at the end of the month would be part of a cut in planned production of about 30% in the month for the model, Tesla’s best-selling model, at the Shanghai factory.
The factory is the most important manufacturing hub for Elon Musk’s electric vehicle company. It kept normal operations during the last week of December last year.
- Reuters, with additional editing by Vishakha Saxena