Tesla stops production at the factory in Shanghai

SHANGHAI, Dec 24 (Reuters) – Tesla halted production at its Shanghai factory on Saturday, according to an internal memo and two people with knowledge of the matter, prompting an earlier plan to halt most work at the factory for the past week in December .

The U.S. automaker canceled the morning shift and told all workers at its most productive production center they could start the break, the people said and the notice seen by Reuters said. The company gave no reason.

Reuters reported earlier this month that the electric car giant planned to halt Model Y production at the plant from December 25 to January 1.

The suspension comes amid a rising wave of infections after China relaxed its zero-Covid policy earlier this month, an abrupt move welcomed by businesses and the public but severely disrupting business operations in the short term.

One of the people said workers at Tesla and its suppliers have also fallen ill as part of this surge, creating challenges for operations in the past week.

Tesla is also struggling with high inventory levels as its second largest market for a decline.

The Shanghai facility has been focused on making models for export for the past week, the person added.

A Tesla China media representative did not immediately respond to a request for comment.

The factory’s suspension of Model Y assembly at the end of the month will be part of a planned production cut of about 30% a month for the model, Tesla’s best-selling model, at its Shanghai factory, Reuters has reported.

The Shanghai factory, the main production hub for Elon Musk’s electric car company, maintained normal operations in the last week of December last year.

It has not been established practice for the facility to close for a year-end holiday.

Reporting by Zhang Yan and Brenda Goh; Editing by Andrew Cawthorne

Our standards: Thomson Reuters Trust Principles.

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