Tesla has officially delayed Gigafactory Shanghai’s ramp-up back to pre-shutdown production capacity as it remains on one closed-loop shift for at least another week. This delay will likely result in Tesla missing out on about 10,000 vehicles produced this quarter.
Like many other companies, Tesla had to shut down production at its Shanghai factory last month after local authorities imposed serious lockdowns on the population in an attempt to limit the spread of COVID-19 after a surge in cases during the first quarter.
The automaker was finally able to restart production on April 19 after 22 days of being shut down.
Tesla brought back 8,000 people to work in a “closed-loop” shift and sleep at the factory to help reduce worker movements in the city. At the time, we noted that on top of missing 22 days of production, it would take time for Tesla to ramp production back up to pre-lockdown levels.
Earlier this month, we learned that Tesla was actually making a lot of progress and aimed to ramp production back to 2,600 vehicles per day by May 16. However, we noted at the time that it appears to be an ambitious goal that is going to be difficult to achieve.
Sure enough, Tesla confirmed supplier issues last week that some reports suggested resulted in production stalling to just 200 units a day.
Now a new internal memo shows that Tesla is sticking to one shift for now and doesn’t plan to ramp up to 2,600 units until at least May 23 (via Reuters):
But the latest memo said that it plans to stick to one shift for its Shanghai plant for the current week with a daily output of around 1,200 units. It also said that it would now aim to increase output to 2,600 units per day from May 23.
Many businesses in Shanghai are currently only allowed to operate under a closed-loop system where workers sleep at the factories to limit exposure to COVID-19; for Tesla to bring in another shift would require them to accommodate thousands more employees at the factory.
On top of its own employee issues due to local restrictions related to the pandemic, Tesla continues to have supply issues as it relies on other local Shanghai suppliers who are also operating under the same conditions.
The market is currently trying to estimate the impact of the Gigafactory Shanghai shutdown and current ramp up to full production capacity during Tesla’s second quarter.
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