Tesla ‘Reduces Shanghai Production Plans’ For January

Tesla is reportedly planning to run its key Shanghai plant on a reduced schedule in January, continuing reduced production that began this month.

The electric carmaker is to run production for 17 days next month from 3 to 19 January, stopping vehicle output from 20 to 31 January for an extended break for the Chinese New Year, Reuters reported, saying it had seen an internal production schedule.

Tesla reportedly gave no reason for the slowdown, but local media have reported a number of Chinese companies reducing production amidst increasing Covid-19 outbreaks.

China shifted away from its previous strict zero-Covid policy earlier this month following protests.

Covid disruption

Tesla reportedly didn’t specify whether work would continue outside the assembly lines for the Model 3 and Model Y at the plant. The Model Y is Tesla’s best-selling vehicle.

The company suspended work at the Shanghai plant on Saturday, bringing forward a plan to pause most work at the factory in the last week of December.

Tesla, along with other automakers and tech companies, has seen a downturn in demand in China this year amidst ongoing lockdowns that have disrupted production and dampened consumer spending.

China is the world’s biggest car market and the Shanghai plant, with about 20,000 workers, accounted for more than half of Tesla’s production for the first three quarters of 2022.

Supply chain challenges

It was earlier reported that staff at Tesla and its suppliers have been falling sick amidst the latest Covid wave, posing operational challenges over the past week.

Tesla earlier halted most work at the factory in May due to supply issues.

Similar issues have affected Foxconn’s biggest Apple iPhone assembly plant in Zhengzhou in recent week, leading to staff shortages and reduced production.