Tesla targets pre-lockdown output in Shanghai by mid-May
Tesla (TSLA.O) is aiming to increase its Shanghai plant’s daily output to 2,600 cars from May 16, an internal memo seen by Reuters said, as it seeks to return production to levels before the city locked down to control the spread of COVID-19.
Tesla, which is currently only running one shift, plans to add more shifts at its Shanghai plant from May 16 to achieve this goal, the memo reviewed by Reuters showed.
That would bring weekly output to 16,900 vehicles based on Tesla’s established work week at the facility, according to a Reuters calculations.
It would also represent a return to production levels at the plant before Shanghai lockdown curbs enacted in late March prompted the company to suspend work at the plant.
Before the lockdown Tesla had run three shifts at the Shanghai plant. The factory which makes Tesla’s Model 3 and Model Y, 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 to the plant.
In one example, Aptiv (APTV.N), which supplies wire harnesses for Tesla, was not able to resume production in mid-April and there were concerns that this could have a knock-on effect on the automaker’s production plans, according to a person familiar with the matter.
But such concerns have been alleviated as Tesla managed to secure additional wire harnesses from other suppliers and Aptiv got approval from authorities to resume production at the end of April, the person said.
Tesla declined to provide immediate comment. Aptiv did not immediately respond to a query for comment.
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. read more
Sales of electric vehicles had been booming in China before the COVID lockdowns. Tesla’s sales in China jumped 56% in the first quarter, while sales for EVs from its larger rival in China, BYD (002594.SZ), quintupled.
Tesla assembled 55,462 vehicles in March at its Shanghai plant when it paused production for six days in the month, data from China Passenger Car Association showed.
Its Shanghai factory reopening was heavily publicised by state media and was carried out with the support of local authorities, who helped Tesla transport more than 6,000 workers and carry out necessary disinfection work, Reuters reported this week.