Tesla plans to ramp up to pre-lockdown output in Shanghai by Tues-memo

·2 min read
A Tesla logo is seen at a groundbreaking ceremony of Tesla Shanghai Gigafactory in Shanghai

SHANGHAI (Reuters) - Tesla Inc plans to restore production at its Shanghai plant to the level at which it had operated before the city's COVID-19 lockdown by Tuesday, a day later than its most recent recovery plan, according to an internal memo seen by Reuters.

Tesla will more than double its daily output to 2,600 electric vehicles at its Shanghai plant from Tuesday, according to the memo detailing the plan. That compares to around 1,000 EVs produced on Monday, according to the memo, and would bring Tesla's weekly output to nearly 16,000 units, the memo showed.

Tesla didn't immediately respond to a request for comment.

Bringing production back to pre-lockdown levels has been a challenge for Tesla at the Shanghai plant, known as Gigafactory 3, because of problems stemming from the city's strict controls imposed from March on the movement of people and goods to curb the spread of COVID-19 during a recent outbreak.

Just over two weeks ago, Tesla had planned to have returned to pre-lockdown production levels by May 16, but then delayed that target by a week, Reuters reported.

Among the challenges for Tesla - and other manufacturers around Shanghai - have been insufficient workers, shipping obstacles and restricted supplies of parts, including wire harnesses.

Tesla was able to resume partial production on April 19 under what Chinese officials describe as a "closed-loop" control to prevent the spread of the virus. Companies in Shanghai are only allowed to reopen if they can operate under such an arrangement, which requires workers to be isolated.

Shanghai reopened a small part of the world's longest subway system on Sunday after closing some lines for almost two months, as the city paved the way for a more complete lifting of its COVID-19 lockdown this week.

The city government is asking local authorities to speed up approvals of certificates needed by workers to return to factories from this week.

The Shanghai shutdown has been costly for Tesla. The automaker sold only 1,512 EVs in China in April, down from 65,754 the previous month.

Before the lockdown, Tesla had run three shifts at the Shanghai plant. The factory, which makes Tesla's Model 3 and Model Y vehicles, reopened on April 19 after a 22-day closure, its longest since the site opened in late 2019.

(Reporting by Zhang Yan, and Brenda Goh; Editing by Bernadette Baum)

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