Exclusive: Tesla will stop most of its production at its Shanghai plant on Tuesday – memo

Tesla China-made Model 3 vehicles will be seen during a delivery event at the carmaker’s factory in Shanghai, China on January 7, 2020. REUTERS / Aly Song

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  • Plant to produce less than 200 cars on Tuesday – note
  • The plant stopped work due to supply problems – sources
  • China’s covid policy poses challenges for manufacturers

SHANGHAI, May 10 (Reuters) – Tesla Inc (TSLA.O) has halted most of its production at the Shanghai plant due to problems securing parts for electric vehicles, according to an internal memo seen by Reuters, the latest in a series of difficulties for the factory.

The plant plans to produce less than 200 vehicles on Tuesday, according to the memo, far less than the approximately 1,200 units it has built each day since shortly after it reopened April 19 after a 22-day closure.

Two sources familiar with the matter had previously said that supply problems had forced the factory to stop production on Monday.

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Shanghai is in its sixth week with an intensifying COVID-19 shutdown that has tested manufacturers’ ability to operate amid severe restrictions on the movement of people and materials.

As recently as last week, Tesla had planned to increase production to pre-lock levels by next week. read more

It was not immediately clear when the current supply problems can be solved, said the people, who asked not to be identified because the production plans are private.

Tesla did not immediately respond to a request for comment.

The China Passenger Car Association is scheduled to release April sales for Tesla, China’s second largest electric car manufacturer behind BYD (002594.SZ), on Tuesday.

Another car association said last week that it estimated that total car sales in China fell by 48% in April when zero-COVID barriers closed factories, restricted traffic to showrooms and put a stop to spending.

Aptiv (APTV.N), Tesla’s main supplier of wiring, stopped shipping from a Shanghai facility supplying Tesla and General Motors Co (GM.N) after covid-19 infections were found among the workers, two people known with the case. Reuters Monday.

Tesla’s Shanghai plant, also known as Gigafactory 3, produces Model 3 sedans and Model Y crossovers for the Chinese market and for export.

Tesla partially resumed production at its Shanghai plant on April 19 after a 22-day shutdown caused by the city’s COVID-19 shutdown.

Tesla aims to increase production at its Shanghai plant to 2,600 cars a day from May 16, Reuters reported earlier. read more

Authorities in Shanghai have tightened a city-wide blockade imposed more than a month ago on the commercial hub with a population of 25 million, a move that could extend curbs for movement throughout the month.

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Reporting by Zhang Yan and Brenda Goh; Edited by Stephen Coates

Our standards: Thomson Reuters Trust Principles.

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