Exclusive: Tesla halted most production at its Shanghai plant on Tuesday – memo

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

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.

The plant plans to build fewer than 200 vehicles on Tuesday, according to the memo, far fewer than the roughly 1,200 units it has been building each day since shortly after reopening on April 19 after a 22-day shutdown.

Two sources familiar with the matter said earlier that supply problems had forced the plant to halt production on Monday.

Shanghai has entered its sixth week of a massive COVID-19 lockdown that has tested manufacturers’ ability to operate amid severe restrictions on the movement of people and materials.

Tesla late last week planned to ramp up production to pre-lockdown levels by next week. Read more

It was not immediately clear when the current supply issues could be resolved, said the people, who asked not to be identified because production plans are private.

Tesla did not immediately respond to an inquiry for comment.

China Passenger Car Association is set to release April sales for Tesla, China’s second-largest electric car maker after BYD (002594.SZ)Tuesday.

Another auto association said last week that it estimated overall auto sales in China fell 48% in April, as zero-COVID shutdowns shuttered factories, limited showroom traffic and capped spending.

optiv (APTV.N)Tesla, the leading supplier of wire tools, has stopped shipping from the Shanghai plant that supplies Tesla and General Motors. (GM.N) After COVID-19 infections were discovered among its workers, two people familiar with the matter told Reuters on Monday.

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

Tesla partially resumed production at its Shanghai factory on April 19 after a 22-day shutdown due to the city’s COVID-19 lockdown.

Tesla was aiming to increase production at its Shanghai plant to 2,600 vehicles a day as of May 16, Reuters previously reported. Read more

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.

(Reporting by Zhang Yan and Brenda Goh) Editing by Stephen Coates

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