Tesla has stopped production in its Shanghai factory once again. It wasn't directly due to the pandemic; rather, it was due to a component shortage. According to Reuters, Tesla began to halt production lines starting from Monday (5/9).
According to the timeline, in March 2022, due to the re-erupted pandemic in Shanghai, the local authority issued a “dynamic zero-COVID policy” and eventually locked down the city. Thus, the Tesla plant in Shanghai stopped working for nearly a month. Then after negotiation, the government agreed to the measures of closed-loop manufacturing. In other words, the Gigafactory's employees must only live in and eat in the plant, in order to resume production. However, after this massive plant was re-opened, within less than 1 month, the factory was forced to pause production again.
Tesla's internal memo indicated that the Shanghai factory only planned to make about 200 electric vehicles on Tuesday (5/10). This target was far lower than their 1,200 EV daily target that was set in April when they resumed working. In fact, Tesla initially hoped to raise its capacity to 2,600 EVs per day by mid-May, so as to make up the loss of progress caused by the lockdowns. However, this goal might be missed for now.
Some people might be curious: Which parts are missing, so that the Gigafactory has to stop working? There is currently no direct evidence to prove which components are in shortage. However, according to the previous news report about the Shanghai lockdowns' statistics, automotive wire harnesses might be the missing component.
Aptiv is one supplier for Tesla and GM. It temporarily stopped shipping out from its Shanghai plant during the last weekend because 2 employees got infected by COVID-19 in this factory. Aptiv also uses the closed-loop manufacturing method, so its confirmed cases meant that the closed-loop system has been broken. This production line might not be able to resume working for the short term.
One of the major products for Aptiv is automotive wire harnesses. In particular, EVs need more electric components and auto wire harnesses. The unit price of automotive wire harnesses isn't high, but this part is essential.
According to the Shanghai city government, there were several waves of work-resumption white lists. On the first white list, only 200 + enterprises were allowed to re-open their factories. In other words, for Tesla, it might not be very easy to rapidly find alternative suppliers in the short run.
Before the March 2022 shutdown, the Shanghai plant was able to make 55 K EVs per month. However, in April, this factory only manufactured 10,757 cars, and the sales were only 1,512 EVs during April. Tesla had made an urgent call to its Gigafactory in Fremont, California, in order to push to 120%-and-above capacity. This move is to make up the huge-and-missed production in the Shanghai plant, and make the 2nd quarter's financial report look better. Since this May is also troublesome for Tesla, the Fremont plant might need to give 200% capacity to reach the target.
(Photo credit: Tesla)