Tesla Pauses Production in Shanghai
Tesla Inc. is briefly suspending production at its Shanghai factory for two days, starting today, as China upgrades restrictions pertaining to a new COVID outbreak. While the rest of the world has been scaling back pandemic-related restrictions, the Chinese Communist Party has begun issuing new mandates after locking down 51 million people at the start of the week. The government has said its part of its no-tolerance approach to the virus after citing roughly 1,700 infections spread across a dozen cities.
This has already started impacting supply chains that have been beleaguered by two years of restrictions already, apparently catching Tesla in the process. Despite Shanghai not having been issued any official orders, there’s been mounting pressure for businesses to temporarily shut down or reinstate protocols to have people work from home.
According to Reuters, Tesla only plans on having its facility idled until Friday. The outlet cited a notice from the factory, in addition to several unnamed sources asking not to be identified because they’re not authorized to speak publicly. But the general claims can be backed up by Chinese media confirming lockdowns in the northeastern province of Jilin, as well as in the cities of Shenzhen and Dongguan. Local authorities in other municipalities have opted to begin suspending transportation services and imposing travel restrictions, which Reuters‘ secret sources said made it impossible for many workers to commute to the factory.
Tesla’s Shanghai factory operates 24/7 and produces cars for the Chinese market. It also serves as an export point for vehicles heading to Germany and Japan. It delivered 56,515 vehicles in February, including 33,315 for export, according to the China Passenger Car Association. That works out to roughly 2,018 vehicles a day.
From Reuters:
Two people briefed on the notice said they understood it applied to Tesla’s general assembly lines. They declined to be identified because the information was not public.
The notice did not specify whether the measures would correspond to a loss of production, or whether Tesla could make up for any lost output.
Authorities in Shanghai have asked many residents not to leave their homes or work places for 48 hours to as long as 14 days as they conduct COVID tests or carry out contact tracing.
In a separate notice issued on Wednesday that was also seen by Reuters, Tesla asked suppliers to estimate how many workers were needed to achieve full production and to provide details of workers affected by COVID restrictions.
It also asked suppliers to prepare workers to live, sleep and eat at the factories in an arrangement similar to China’s “closed-loop management” process. Apple supplier Foxconn was allowed to resume some operations at its Shenzhen campus on Wednesday after it set up such an arrangement.
Suppliers have reportedly already told the automaker that they’re only covered for about two days of downtime. Of course, plenty more manufacturers will be impacted if China’s latest round of lockdowns persists for longer than that. We’ve already seen numerous Japanese facilities having to ease off production to account for hiccups in Asian supply chains ahead of the new restrictions, with Toyota being the most recent. The situation clearly needs to be managed better. But the remedy shouldn’t come down to people having to live on the factory floor. If the principles Musk touts publicly are valid, he needs to prevent such labor abuses.
[Image: B.Zhou/Shuterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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China has COVID-19 Omicron lockdowns in Shenzhen, too. China successfully contained OG COVID, and has been making hay in terms of domestic propaganda about it ever since. Because of their aggressive approach, China held off the COVID waves longer than most. We're mostly-done with our Omicron BA.1 surge here in the US, and they're just getting started with Omicron in China. Hang on, the ride's not over yet. Like it or not, we live in a global economy, so it will affect us. Different plague-mitigation strategies, different consequences.
I predict the virus that originally escaped from a lab in China partially funded by the u.s. taxpayers will rear it's ugly head again just before the mid term elections. Then the mandates which suddenly went away will return (despite proof they didn't help) and of course we will need millions of absentee ballots. Anyone asking for proof that those ballots are legit will be branded a racist and if they dare posts on dem controlled sights like facebook or youtube they will be censored. Because youtube has standards that prevent people from questioning the integrity of the elections. But curiously you can find unlimited stories on youtube of people like Hillary Clinton or Al Gore and their supporters questioning the integrity of U.S. elections. Odd. Also curious that state media is not following the attempts of the FDA to slow roll the release of the Pfizer vaccine trials. They wanted 75 years to release the data. hmm So far since the judge ordered the FDA to release data we have learned that of the 38 deaths in the study slightly more than half were in the vaccinated group. I find that newsworthy.