May 26, 2022

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Exclusive: Tesla halts most production at Shanghai plant, halts April sales

Exclusive: Tesla halts most production at Shanghai plant, halts April sales

Chinese-made Tesla Model 3 cars are seen during a delivery ceremony at the automaker’s factory in Shanghai, China, January 7, 2020. REUTERS/Ali Song

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  • Factory to produce less than 200 cars on Tuesday – memo
  • Factory stopped working due to supply problems – sources
  • China’s COVID policies pose challenges for manufacturers

SHANGHAI, May 10 (Reuters) – Tesla Corporation (TSLA.O) It has halted most of its production at its Shanghai plant due to problems securing parts for its electric cars, according to an internal memo seen by Reuters, the latest in a string of difficulties the plant is facing.

Data from the China Passenger Car Association (CPCA) showed on Tuesday that the Chinese automaker’s sales actually fell 98% in April from the previous month, underscoring the damage caused by the harsh coronavirus lockdowns in China.

Shanghai has entered its sixth week of an intense lockdown that has tested manufacturers’ ability to operate amid severe restrictions on the movement of people and materials.

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Tesla planned to manufacture fewer than 200 cars at its plant in the city on Tuesday, according to the memo, well below about 1,200 units per day shortly after reopening on April 19 after a 22-day shutdown.

Tesla did not respond to a request for comment.

The authority said that after reopening the factory, the factory produced 10,757 cars by the end of April, of which 1,512 cars were sold.

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That compared to 65,814 cars sold in March, the lowest sales tally since April 2020, four months after the plant began delivering cars made in China.

The data showed that Tesla did not export any Chinese-made Model 3s and Model Ys from its Shanghai factory in April.

Two people familiar with Tesla’s operations said earlier that the Shanghai plant halted operations on Monday after it struggled to buy supplies.

The company had been aiming to increase production at the plant to 2,600 vehicles per day as soon as possible next week, Reuters previously reported. Read more

The CPCA said total passenger car sales in China, the world’s largest auto market, fell nearly 36% in April from a year earlier. However, sales of battery-powered cars and plug-in hybrids – a category China targets for stimulus – rose more than 50%, buoyed by a particularly good performance by BYD. (002594.SZ) and SAIC-GM-Wuling (GM.N)And (600104.SS).

Another auto association estimated last week that total auto sales in China fell 48% in April, as lockdowns shuttered factories, restricted traffic to showrooms and put a cap on spending.

Shanghai authorities have tightened the city-wide lockdown imposed more than a month ago on the mall of 25 million people, a move that could extend restrictions on movement through the month.

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(Reporting by Zhang Yan and Brenda Goh) Additional reporting by Sophie Yu. Editing by Stephen Coates, Kirsten Donovan

Our criteria: Thomson Reuters Trust Principles.