Tesla suspends production at Giga Shanghai factory due to rising Covid cases in China

Tesla suspended vehicle production at its Shanghai Gigafactory on Saturday due to rising Covid-19 cases in China. Reuters reported that the automaker was considering plans to suspend most work at the Shanghai Gigafactory in the last week of December 2022. However, the move was ahead of the already planned timeline. The U.S. electric carmaker has reportedly canceled an early shift at its factories and told workers they can start taking breaks. However, Tesla did not explain the reasons behind the suspension.

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Updated on:
December 25, 2022 at 12:32 am

Tesla’s Giga Shanghai factory produces Model 3 and Model Y cars. (Reuters)

While the automaker didn’t say any reason behind the shutdown, the report said its factory workers and supplier workers have also fallen ill due to rising Covid-19 cases in the country. Indeed, it has given businesses and the public a breather as Covid-19 cases surged in China, shutting down production after the country eased its zero-Covid policy earlier this month. Therefore, Tesla’s move may be part of the automaker’s strategy to fight off the Covid-9 infection.

Also read: Tesla Model Y smashes VW Beetle’s 53-year-old record

Tesla is also grappling with rising inventory levels as its second-largest market braces for a downturn. In this case, Tesla’s Shanghai Gigafactory has been focusing on building cars for the export market last week, rather than prioritizing local market demand. The shutdown of the Model Y at the Shanghai Gigafactory will be part of the automaker’s plan to cut production by about 30% in December 2022.

Interestingly, the news agency reported earlier this month that Tesla plans to suspend production of the Model Y electric crossover at its Shanghai Gigafactory from December 25, 2022 to January 1 next year. Giga Shanghai is the automaker’s most important manufacturing hub, producing two of its best-selling cars — the Model 3 and Model Y. The latest move breaks Giga Shanghai’s history as it maintained normal operations last week until December 2021.

First published date: December 25, 2022 at 12:32pm CST


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