Tesla suspends production at Giga Shanghai amid rising Covid cases in China

  • Tesla Giga Shanghai is the automaker's most important production hub and manufactures two of the brand's bestselling cars - Model 3 and Model Y.
Tesla's Giga Shanghai facility manufactures Model 3 and Model Y vehicles. (REUTERS)
Tesla's Giga Shanghai facility manufactures Model 3 and Model Y vehicles.

Tesla on Saturday suspended vehicle production at its Shanghai Gigafactory amid the rising Covid-19 cases in China. Reuters has reported that The automaker was mulling the plan to pause most of the works at the Shanghai Gigafactory in the last week of December 2022. However, the move comes ahead of the schedule that was already planned. The US electric car manufacturer reportedly cancelled the morning shift at the factory and told its workers that they could start their break. However, Tesla didn't give a reason behind this production suspension.

While the automaker didn't provide any reason behind this suspension, the report claims that its own employees at the plant and the staff of suppliers also have been falling sick amid the rising cases of Covid-19 in the country. Indeed, the production suspension comes amid a rising wave of Covid-19 cases in China after the country eased its zero-Covid policy earlier this month, which came as a breather for businesses and the public. Hence, Tesla's move could be a part of the automaker's strategy to fend off Covid-9 infections.

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Tesla is also grappling with elevated inventory levels as its second-largest market has braced for a downturn. In such a situation, Tesla's Shanghai Gigafactory has been focusing on manufacturing cars for export markets for the last week instead of prioritizing the local market demand. Production suspension of the Model Y at Gigafactory Shanghai would be a part of the automaker's planned production cut of around 30 per cent in December 2022.

Interestingly, the news agency reported earlier this month that Tesla planned to suspend production of the Model Y electric crossover at the Shanghai Gigafactory from 25th December 2022 to 1st January next year. The Giga Shanghai is the automaker's most important manufacturing hub, which produces two of its bestselling cars - Model 3 and Model Y. The latest move comes as a disruption in the history of the Giga Shanghai, as it kept operational activities normal during the last week of December 2021.

First Published Date: 25 Dec 2022, 12:32 PM IST
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