Tesla Reportedly Stops Production in Shanghai

Reports indicate Tesla has idled production in Shanghai, despite plans for the facility to resume production this week. Workers had been given time off for a five-day break that incorporated China’s International Workers’ Day (May 1st), with production expected to resume on the 6th. However, the facility made the surprise decision to remain closed.

Staff have been informed that the facility will not reopen until May 9th, according to inside sources. While this may lead one to wonder if the factory has found itself at the epicenter of a new coronavirus outbreak, there’s likely another explanation. Local outlets report Giga Shanghai as suffering from part shortages.

One of the biggest casualties of the pandemic has been supply chains. When the virus first appeared in China, reliable parts procurement was among the first casualties as facilities were forced into shutdown by the government. Initially, this meant foreign manufacturers faced supply chain issues and rolling shortages. The virus ultimately spread across the globe, exacerbating the problem as more and more equipment manufacturers closed.

Bottlenecks are now expected to become the norm and, according to Bloomberg, the reason Tesla had to extend its shutdown in China:

The reason for the abrupt halt wasn’t immediately clear but Chinese technology news site 36kr reported that it was because of component shortages. While Tesla’s only car factory outside the U.S. is seeing delays in receiving parts for its Model 3 in the future, it’s also facing problems with a crucial piece of manufacturing equipment that’s being fixed, according to [unnamed sources].

The production halt means that Tesla isn’t making any cars worldwide because its other vehicle-assembly plant — in Fremont, Calif. — has been idled because of the coronavirus. That’s made the Shanghai factory even more crucial for Tesla as the U.S. is weeks, if not months, behind China in reopening its economy.

Officially, Tesla said it was using the holiday to go over the location’s hardware after tweaking the assembly line. Apparently, it needs a little more work. There’s supposedly a skeleton crew on site to conduct maintenance on what should be sparkly new equipment.

The facility’s first deliveries took place in December 2019, only to have the plant placed on pause the following month as COVID-19 spread across the country. It also was among the first to resume production after getting assistance from local authorities, giving Tesla a leg up — just as its California factory came under threat from the virus, ultimately closing at the end of March.

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