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Shanghai plant assembles roughly 2,000 cars every day
Tesla Inc (NASDAQ: TSLA) has hit a production snag for the first time outside the US, as its manufacturing in the Shanghai plant has been suspended for almost three weeks due to city-wide COVID-19 lockdowns in China’s financial hub.
Earlier this month, Dan Ives, an analyst at Wedbush Securities Inc, estimated that the plant typically produces around 2,000 cars every day, based on losses seen during the first quarter.
Tesla might have lost around 38,000 units since March 28, when the electric carmaker halted its facility, which makes the Model 3 and the Model Y for both export and domestic consumption.
The Texas-based EV maker manufactured 305,000 vehicles in the fourth quarter worldwide, so the loss is about 12.5% till now.
Tesla’s Shanghai plant, which started its manufacturing in late 2019, produced 182,174 vehicles in the first quarter, China Passenger Car Association data show, suggesting a nearly 21% production loss in China.
COVID scenario in China
There is little indication as to when the situation might change.
Shanghai, the financial hub of China with a 25 million population, is posting record COVID-19 cases almost daily and is still under restrictions, which is also affecting the manufacturing supply chains.
Chinese EV maker Xpeng Inc’s CEO, He Xiaopeng, said all automakers might have to halt production in May also if shutdowns persist in the area.
“If supply chain companies could not find a way to resume operation and production, it’s likely all Chinese OEMs may have to suspend production in May,” he posted on his personal WeChat and Weibo accounts Thursday evening, Bloomberg reported.
“Our base case estimate for reopening is the first week in May,” Junheng Li, founder, and CEO of JL Warren Capital, a Chinese market-focused equity research firm, said of Tesla, the report mentioned.
She estimated that some 84,000 units might be lost if the scenario persists.
Tesla’s output losses might be even steeper if neighboring cities were to be locked down too, potentially affecting the supply of auto parts to the manufacturing facility, Li said, Bloomberg reported.
The plant’s reopening may also be done in stages, and production capacity after any resumption will “depend on the supply of components Tesla can get.”
Picture Credit: CNBC
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