Tesla halts production at Shanghai plant due to supply issues

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EXCLUSIVE Tesla halts production at Shanghai plant due to supply issues - sources


Tesla Cybertruck Tesla halts production at Shanghai plant due to supply issues EF6FEEYMGNKTHIESD6N7DEMJJA

Tesla China-made Model 3 vehicles are seen during a delivery event at the carmaker's factory in Shanghai, China January 7, 2020. REUTERS/Aly Song

SHANGHAI, May 10 (Reuters) - Tesla Inc (TSLA.O) halted production at its Shanghai plant on Monday due to issues with securing parts for its electric vehicles, two people familiar with the matter said, the latest in a series of difficulties for the factory.

Shanghai is in its sixth week of an intensifying COVID-19 lockdown that has tested the ability of manufacturers to operate amid hard restrictions on the movement of people and materials.

Tesla had planned as late as last week to increase output to pre-lockdown levels by next week.
It was not immediately clear when the current supply issues can be resolved and when Tesla would be able to resume production, said the people, who asked not to be identified because the production plans are private.

Tesla did not immediately respond to a query for comment.

China Passenger Car Association is scheduled to release April sales for Tesla, China's second-largest EV maker behind BYD (002594.SZ), on Tuesday.

Another auto association said last week it estimated overall auto sales in China dropped 48% in April as zero-COVID lockdowns shut factories, limited traffic to showrooms and put the brakes on spending.

Aptiv (APTV.N), Tesla's main supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla and General Motors Co (GM.N) after COVID-19 infections were found among its workers, two people familiar with the matter told Reuters on Monday.

Tesla's Shanghai plant, also known as the Gigafactory 3, produces the Model 3 sedan and Model Y crossover for the China market and for export.

Tesla partially resumed production at the Shanghai plant on April 19 following a 22-day closure caused by the city's COVID-19 lockdown.

Tesla had been aiming to increase output at its Shanghai plant to 2,600 cars a day from May 16, Reuters reported previously. read more

Shanghai authorities have tightened a city-wide lockdown imposed more than a month ago on the commercial hub with a population of 25 million, a move that could extend curbs on movement through the month.

https://www.reuters.com/business/au...i-plant-due-supply-issues-sources-2022-05-10/
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Tesla Says China Plant Continues to Make Cars; No Halt Notice

Bloomberg News
Mon, May 9, 2022, 10:12 PM

Tesla Cybertruck Tesla halts production at Shanghai plant due to supply issues EF6FEEYMGNKTHIESD6N7DEMJJA




(Bloomberg) -- Tesla Inc. hasn’t halted output at its Shanghai factory, though it is experiencing some disruption to logistics amid the city’s long-running Covid-19 lockdown, a spokesperson for the U.S. carmaker said Tuesday.
Most Read from Bloomberg

Reuters reported earlier that output had halted, prompting Tesla to issue a statement saying it had received no notice of any Shanghai plant cessation and pointing out that some vehicles are still being made.

Tesla’s China factory was shuttered for three weeks in April as Shanghai was plunged into lockdown in an attempt to halt community spread of Covid-19. The plant started up again in late April under a so-called closed loop system whereby workers live on site and are tested regularly.
Read more: Tesla Looking to Boost Shanghai Car Production With Second Shift

Prior to the pandemic-induced halt on March 28, Tesla workers in Shanghai were working three shifts covering 24 hours, seven days a week. The workers in the current closed-loop system have been doing 12-hour shifts, six days a week.

One of the problems stems from a shortage of wire harnesses from Aptiv Plc, which had to stop shipping supplies from a plant that supplies Tesla and General Motors Co. after infections were found among its employees, Reuters said.

Tesla’s Shanghai factory, which in regular times pumps out around 2,100 cars a day, remains challenged by component shortages, other people familiar said last month. The U.S. automaker only has inventory for just over two weeks based on its current closed-loop schedule and logistics are a major problem for many other parts.

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.

https://finance.yahoo.com/news/tesla-halts-output-shanghai-plant-020307752.html
 
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Brace Yourself: Tesla’s April China Sales Will Look Ugly
By
Al RootFollow

Updated May 9, 2022 5:45 pm ET / Original May 9, 2022 12:15 pm ET

Tesla Cybertruck Tesla halts production at Shanghai plant due to supply issues im-540417?width=639&height=426

A Tesla Model 3 car.
Jade Gao/AFP via Getty Images

Tesla’s April wholesale volumes for China are due any day now. Investors will have to brace for weak numbers.

The numbers, however, shouldn’t be a shock. The Tesla TSLA –9.07% (ticker: TSLA) plant in Shanghai was shut for weeks amid local Covid restrictions. The plant opened up later in April at reduced operating rates in a closed-loop configuration, with some employees living at the facility.
The best month for wholesale volumes from Tesla’s Shanghai plant was almost 71,000 units reported in December 2021. That’s the potential of the plant.

Roughly guessing, April should be more like 15,000 units. The plant had reduced output for about one third of the month. Tesla didn’t respond to a request for comment about the estimate.

Tesla doesn’t report its numbers. Instead, Wall Street relies on industry data form the China Passenger Car Association.

With reduced April production, Tesla will have trouble setting another delivery record in the second quarter of 2022. Tesla delivered about 310,000 electric vehicles in the first quarter of 2022, the highest quarterly number the company has ever reported.

Analysts currently project about 300,000 units for the second quarter, but estimates range from about 250,000 to 350,000 units, after some updates. Before Covid locked down Shanghai, the analyst consensus estimate for the second quarter was close to 350,000 units.

The current 300,000 figure might be made up of about 135,000 from Shanghai—which implies production recovers in May and June—along with 150,000 from Tesla’s Fremont, Calif., facility and perhaps 5,000 to 10,000 at each of Tesla’s new facilities in Germany and Texas,.

Covid roiled results at Tesla’s Chinese EV peers, as well. NIO NIO –9.18% (NIO), for instance, delivered about 5,100 vehicles in April. The best month ever for NIO was almost 11,000 vehicles delivered in November 2021.

NIO doesn’t manufacture its vehicles in Shanghai, but the entire Chinese automotive supply chain was disrupted by the Shanghai lockdown.

Tesla stock is down about 25% since the beginning of April, when the lockdown started to bite production rates. The S&P 500 and Nasdaq Composite are off about 11% and 17%, respectively, over the same span.

Not all of the declines are related to China. Tesla investors have also had to weigh the impact of CEO Elon Musk’s pending purchase of Twitter TWTR –3.69% (TWTR).

Write to Al Root at [email protected]

https://www.barrons.com/articles/tesla-china-sales-51652112846
 
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Tesla has denied this rumor.

https://driveteslacanada.ca/news/te...ply-chain-disruptions-not-stopped-production/

Please update the title so as to not propagate FUD.
It sounds like there's another issue that nobody's talking about. In an article from Elecrek, they said Tesla produced 10,757 vehicles but only sold 1,512 in April. It sounds as though, with all the covid restrictions, they are having a hard time shipping the vehicles. This would mean there are over 9,000 vehicles sitting around the factory. At some point in time, if you can't ship, it's hard to store 2,000 vehicles a day.
Here's the article: https://electrek.co/2022/05/10/tesl...000-electric-vehicles-april-despite-shutdown/
 

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"Reuters reported earlier that output had halted, prompting Tesla to issue a statement saying it had received no notice of any Shanghai plant cessation and pointing out that some vehicles are still being made."

This is in the second post if you had bothered to read it.
Or…. You could fix the headline and we wouldn’t have to discuss a bad-rumor.
 

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It sounds like there's another issue that nobody's talking about. In an article from Elecrek, they said Tesla produced 10,757 vehicles but only sold 1,512 in April. It sounds as though, with all the covid restrictions, they are having a hard time shipping the vehicles. This would mean there are over 9,000 vehicles sitting around the factory. At some point in time, if you can't ship, it's hard to store 2,000 vehicles a day.
Here's the article: https://electrek.co/2022/05/10/tesl...000-electric-vehicles-april-despite-shutdown/
This is normal.

Most of them were likely exported. It’s pretty common for the first half of their Shanghai production to be put onto a boat and exported.
 


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Reuters can edit your post?
Reuters is reputable in business news. I found it a bit odd that it hasn't retracted this.

“Tesla Inc halted production at its Shanghai plant on Monday due to issues with securing parts for its electric vehicles, two people familiar with the matter said“

So is it FUD? Could be a matter of word play?
 
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China Car Sales Plunge as Shanghai Lockdown Takes Toll
  • Passenger vehicle sales dropped 36% last month year-on-year
  • Tesla exported zero China-made cars from Shanghai plant

https://www.bloomberg.com/news/arti...socialflow-twitter-business&utm_medium=social

SHANGHAI (Reuters) – Tesla Inc shipped 4,767 cars from its Shanghai plant to Slovenia on Wednesday, the first batch of exports since the factory reopened on April 19, a Shanghai government-backed media outlet reported.

Tesla did not export any China-made Model 3s or Model Ys from the Shanghai plant in April, the China Passenger Car Association said on Tuesday, as China’s zero-COVID-19 policies disrupted production and logistics.

https://www.fxempire.com/news/artic...-plant-first-export-since-reopen-media-996797
 
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COVID-19: China lockdowns blamed as Tesla and Toyota car production takes hit
COVID restrictions in China are taking an increased toll on manufacturers generally and there are increasing worries that demand will continue to outweigh supply, adding to the global inflation problem.
Tesla Cybertruck Tesla halts production at Shanghai plant due to supply issues skynews-james-sillars-business-reporter_4616228
James Sillars

Business reporter @SkyNewsBiz
Tuesday 10 May 2022 16:26, UK

Tesla Cybertruck Tesla halts production at Shanghai plant due to supply issues skynews-tesla-shanghai_5767353

Image:Tesla's operations in Shanghai are being increasingly disrupted by COVID restrictions and supply issues. Pic: AP
https://www.facebook.com/sharer/sha...as Tesla and Toyota car production takes hit

The world's largest carmaker has revealed further cuts to production lines as a result of COVID disruption in China while Tesla has reportedly suspended the bulk of its manufacturing operation in the lockdown-hit city of Shanghai.

Toyota, which had already slashed six production lines at a total of four plants, revealed on Tuesday that a total of 12 factories would now be affected as supply chains are delayed by the effects of China's pandemic curbs.

Shanghai is into its sixth week of heavy restrictions on movement that has not only affected factory output but also shipments to and from its bustling port, China's largest by cargo volumes.

Toyota said that 14 more production lines would be affected by the suspension, for up to six days this month.

It would mean, the company said, that around 40,000 vehicles faced delays and wider disruption would result in the group's global production target falling by 50,000 to 700,000 vehicles for the month.

The announcements add to growing fears that China's coronavirus restrictions, which have now spread to the capital Beijing, will prove disruptive to global growth and add to the inflation problem further down the track as competition for parts intensifies.

A chip shortage has already been widely blamed for damaging the car industry's recovery from the pandemic, including in the UK.

Elon Musk's electric car firm Tesla said last month it had managed to pass on extra costs in its supply chain to help boost group profits.

But there is further evidence that its Shanghai operation will drag on its second quarter performance after a 22-day shutdown that ended on 19 April.

Reuters said it had seen an internal memo showing that production there had mostly been halted due to problems securing parts, with just 200 vehicles a day tipped to be completed.

The factory has the ability to churn out 1,200 cars on a daily basis.

Data released by the Chinese authorities also showed that Tesla sales were 98% down in April versus the previous month as the curbs on normal activities took a toll on demand.

It also showed that Tesla did not export any China-made Model 3s and Model Ys in April.

https://news.sky.com/story/covid-19...t-to-tesla-and-toyota-car-production-12609929
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