Tesla puts production hike in China on hold

TESLA has been forced to delay a production increase at its Shanghai factory because it is unable to find nearby sleeping quarters for workers in the locked-down city.

The electric carmaker cannot bring in more staff because of rules that require companies to operate a “closed loop” system where employees live, work and sleep in isolation, to minimise the risk of spreading infection.

Around 1,300 Model 3 and Model Y cars are being made per day at the factory, which reopened in April following a 22-day closure. Tesla has shelved a plan to raise that rate to 2,600 vehicles from May 23.

Shanghai is in a strict lockdown, which has lasted more than a month, with millions of people forced to stay in their homes as China battles to maintain its zero-covid policy despite surging omicron cases.

The lockdowns are due to ease in the coming days. China’s industrial output fell 2.9pc in April from a year ago and was down 5pc compared with March, in part because of Shanghai’s lockdowns.

Unemployment in China’s largest cities surged to 6.7pc, the highest figures since at least 2018. City officials

said Shanghai had yesterday begun reopening supermarkets, pharmacies and convenience stores.

Tesla shares fell 4.2pc to $737, valuing it at $763bn (£623bn). The stock has lost more than a quarter of its value since Elon Musk, chief executive, purchased a 9pc stake in social media platform Twitter and pursued a takeover.