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Tesla is shutting down production at Gigafactory Shanghai for two days this week amid a surge in COVID-19 cases in China – though the company didn’t confirm it was the reason.
China has strict containment plans that include mass testing and isolation, which has served the country well last year in limiting the spread of the virus in the country.
But less than 3 months in 2022, the country already has more cases than it did during the whole of last year.
The number of new daily cases is now hitting highs not seen since the first wave of the virus in 2020
It has triggered lockdowns in some regions and mass testing in order to try to limit the spread.
Amid this context, Tesla announced to employees and suppliers that it would be shutting down production on Wednesday and Thursday at Gigafactory Shanghai(via Reuters):
“Electric vehicle giant Tesla is suspending production at its Shanghai factory for two days, according to a notice sent internally and to suppliers, as China tightens COVID restrictions to curb the country’s latest outbreak.
The Shanghai factory runs around the clock and suppliers and Tesla staff were told on Wednesday in the notice, reviewed by Reuters, that production would be suspended for Wednesday and Thursday.”
Gigafactory Shanghai is critical to Tesla’s operations with the factory becoming its largest by volume last year and exporting many Model 3 and Model Y vehicles to European markets.
Tesla didn’t confirm that the shutdown was due to the surge in COVID-19 cases or the increased restrictions being put in place to curb it, but we have seen several similar factory shutdowns in the last few days.
Both Toyota and Volkswagen had to recently announce similar shutdowns due to the pandemic.
Supply chain constraints could have also been behind the shutdown as it is has been in the case recently.
Recently, Tesla has been producing close to 60,000 vehicles per month at Gigafactory Shanghai or about 2,000 per day. So even just 2 days of no production could significantly affect the output and create even longer delivery timelines.
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