China Covid-19 crisis: Tesla halts production in Shanghai due to supply shortage

Tesla’s main supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla and General Motors Co after Covid-19 cases increased, as reported by Reuters.

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Due to issues with securing parts for its electric vehicles, Tesla Inc halted production at its Shanghai plant on May 9, two people familiar with the matter said.

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 could 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. The China Passenger Car Association is scheduled to release April sales for Tesla, China's second-largest EV maker behind BYD, on May 10.

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

Aptiv, Tesla’s main supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla and General Motors Co after Covid-19 infections were found among its workers, two people familiar with the matter told Reuters on May 9.

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.

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.

(With inputs from Reuters)