Because of The Lockdown in Shanghai, Tesla Company is Facing a Massive Loss of 40,000 Electric Vehicles!

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Podcast – Tesla Inc. Faces The Loss of 40,000 Electric Cars Due to The Lockdown of Shanghai

Tesla has reached a significant manufacturing hurdle in Shanghai, China for the first time.

Due to citywide lockdowns in China‘s financial capital, production at the electric carmaker’s Shanghai facility, its first outside the United States, has been halted for over three weeks. Since the lines went quiet on March 28, roughly 39,900 electric cars have been lost at a pace of about 2,100 per day.

There are a few indicators that the situation will improve. The metropolis of 25 million people is reporting record COVID-19 cases practically daily, and much of the city is still restricted in mobility, with food and industry supply networks still disrupted.

According to Junheng Li, founder, and chief executive officer of JL Warren Capital, a Chinese equity research firm, Tesla‘s reopening is expected to happen in the first week of May. She predicted that 84,000 units would be lost in that case.

If nearby towns were also closed, Li believes Tesla’s production losses would be significantly worse, posing a threat to the factory’s supply of car components. The plant may be activated in phases, and the capacity will then depend on the supply of components that Tesla can procure.

Based in Austin, Texas, Tesla produced 305,000 vehicles internationally in the 4th quarter, so a loss of nearly 40,000 cars is almost 13% of that. Its Shanghai facility, located on the city’s eastern outskirts, produces the Model 3 and Model Y for both export and local use.

According to an assessment earlier this month by Dan Ives, an analyst at Wedbush Securities Inc., the facility generally produces around 2,000 cars per day, based on losses witnessed during the first quarter.

Due to a shutdown in Shanghai, Tesla had to cease manufacturing in late March.

According to those familiar with the situation, the automaker has started canvassing certain employees to see if they can function under a so-called closed-loop system if they are permitted to leave their residences. Volkswagen AG and Robert Bosch GmbH, for example, have adopted a different type of loop system in which workers reside on-site and are checked on a regular basis. It hasn’t worked out well for VW in Shanghai, with locked-in workers unable to create the vehicles due to a shortage of parts arriving at the facility.

According to figures from the China Passenger Car Association, Tesla’s Shanghai facility produced 182,174 vehicles in the first quarter. The most recent production halt was the biggest since the lines first started up in late 2019 – longer than when COVID initially hit in 2020, and far longer than the occasional chip shortages that have necessitated a two-or three-day suspension in recent months.

Based on maintenance schedules, the facility normally operates six or seven days a week on three shifts. And resuming manufacturing after a halt isn’t a quick procedure.

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