Tesla Halts Output At Shanghai Plant On Supply Issues Reuters L2Zidh8
BloombergMay 10, 2022
Electric vehicle (EV) maker Tesla has halted most production at its facility in Shanghai due to continuing problems securing parts. The news comes amid strict COVID lockdowns in the city.
New vehicle production at the recently reopened facility, known as the Gigafactory 3, was set at fewer than 200 units, down from its recent daily average of 1.2K units.
No wonder Tesla is struggling - nearly 60% of producers had their capacity slowed or reduced due to COVID restrictions or difficulties obtaining workers or parts. China's dynamic zero-COVID strategy has a cascading effect on supply chains and that, in turn, impacts company logistics.
Tesla's future still looks bright despite current disruptions. Earlier this month, the company revealed that it plans to build a second factory in Shanghai, giving it the power to build up to 2M cars a year in the city. Things will improve even more once COVID subsides in Shanghai, allowing Tesla's deep relationship with China to continue.
There is a 28% chance that Tesla will become the largest car company in the world (by sales) before 2035, according to the Metaculus prediction community.