According to people familiar with the situation, Tesla halted vehicle manufacturing at its Shanghai factory on Saturday. This extended a planned eight-day manufacturing halt by car output.
According to the sources, Tesla is fighting a wave of COVID-19 infections among its employees and suppliers. This prompted the decision to extend the work halt. A temporary halt was implemented after a recent slowdown in global demand for Tesla automobiles.
Tesla informed several of its Shanghai workers on Saturday that it would cease car manufacturing that day, a day earlier than planned. According to the employees, production would restart on January 2nd, as previously announced.
It is not uncommon for car manufacturers to pause production on certain lines during the Lunar New Year holiday and the summer. However, according to one source, Tesla has not historically halted all car production during Christmas.
The people said that due to the inventory build-up, Tesla wouldn’t be hurt by the manufacturing halt. Tesla’s Shanghai factory capacity was expanded to more than 750,000 vehicles per year during the summer. But, owing to the sluggishness of China’s car market over the last two months, demand for its automobiles has been lower than estimated.
Is the shutdown a “no big deal”?
Compared to September, when the wait was up to five times as long, Tesla buyers in China can expect to receive their new cars in four weeks.
Tesla stayed silent at the request for comment. According to the Global Times, a Communist Party-run publication in China, workers at the firm will take a break this week for yearly maintenance of its car production lines in Shanghai. According to the Global Times article, Tesla said it would not close its charging pile manufacturing facility during this time. However, Reuters was the first to report the suspension.
After Beijing eased its zero-COVID policies, infections have swept across China in recent weeks. It covered workers at car manufacturers, their suppliers, and dealership personnel. Since concerns about infection persist, fewer potential customers have been shopping in stores.
Because of COVID-19-related disruptions, Tesla’s Shanghai factory had to shut down for weeks earlier this year, prompting Wall Street to lower its projections for its expansion.
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