The ongoing COVID-19 pandemic is still affecting industries all over the world, with Tesla (TSLA) still suffering delays due to various restrictions and lockdowns. According to a memo reported on by Reuters, Tesla has delayed its plan to restore its Shanghai Gigafactory capacity.
Reported on by Reuters on May 16, 2022, an internal memo has revealed that Tesla has decided to delay its plans to lift production capacity of its Shanghai Gigafactory. Previously, Tesla had planned to increase its output in Shanghai to its pre-lockdown levels, though, these plans are now on hold for at least one week.
As it stands, Tesla aims to have production output of 1,600 cars a day from this international plant. It had hopes of increasing this number to 2,600 cars a day, but has delayed this goal until May 23.
Shanghai has been experiencing one of the most intense lockdowns in a bid to hit COVID zero. This has impacted all areas of the global supply chain, with cargo unable to leave the area through usual routes. In an effort to keep the economy going, companies in places like Shanghai where the lockdowns are occurring can open only if workers live and sleep near production sites, essentially creating a “closed-loop”.
Reuters reports that a person familiar with the matter states that Tesla is facing challenges in doubling the number of workers able to perform in the “closed-loop” operation. Tesla has already lost a month of build volume due to these shutdowns, so getting more workers in to increase production is a logical next step. Despite these lockdowns, Tesla still plans to expand its Shanghai Gigafactory post-lockdown.