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Tesla’s half-idle Shanghai factory exposes strain in China’s commercial hub as Covid-19 lockdown enters fourth week
- Giga Shanghai’s inventory of components can support just a week’s worth of production, sources say
- It will take Shanghai-based carmakers such as Tesla some time to fully restore their supply chains and run at full capacity: analyst
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US electric vehicle (EV) maker Tesla’s Shanghai factory is assembling 1,000 vehicles a day – just half of its output before the city’s latest Covid-19 outbreak – after resuming work this week. Production at the facility was suspended for 22 days because of a citywide lockdown.
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At its Gigafactory 3 in the Lingang free-trade zone, 8,000 workers have been convened to build its bestselling Model 3 and Model Y EVs, but only half of the workforce can be fully utilised in a single shift, because Tesla still does not have adequate components for a full resumption, two industry officials with knowledge of the matter said.
The plant, which is also known as Giga Shanghai, suspended operations late last month and had not assembled a single EV until it restarted operations on Tuesday afternoon and could only tap an inventory of components that can support just a week’s worth of production, the officials said.
“A large-scale carmaker like Tesla is supposed to have an inventory for at least two weeks of production when it is in normal operation,” said David Zhang, a researcher at the North China University of Technology. “It will be some time before Shanghai-based carmakers like Tesla, Volkswagen [VW] and General Motors [GM] can fully restore their supply chain and run at full capacity.”
It is expected that it might take the US carmaker several weeks to get the assembly line running at full capacity. Normally, Giga Shanghai has two shifts that can together churn out more than 2,000 EVs a day. Tesla has been hiring new workers and expanding facilities at the plant to increase its capacity.
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