Tesla halts production at Shanghai plant due to supply issues, sources say

Tesla Inc halted production at its Shanghai plant on Monday due to issues with supplies, two people familiar with the matter said.

The suspension comes just three weeks after the US automaker partially resumed production at the Shanghai plant on April 19 following a 22-day closure caused by the city’s Covid-19 lockdown, reflecting the complexity and uncertainties of keeping manufacturing going as China battles the coronavirus.

It is unclear when the supply issues can be resolved and when Tesla can resume production, said the people, who declined to be identified as the matter is private. Shanghai is now in its sixth week of lockdown.

Among Tesla suppliers facing issues is wire harness maker Aptiv which had to stop shipping supplies from a plant that supplies Tesla and General Motors after with infections found among its employees, sources said on Monday.

Tesla did not immediately respond to a query for comment.

The company was aiming to increase output at its Shanghai plant to 2,600 cars a day from May 16, Reuters reported previously, as it seeks to restore production to levels before the lockdown.

The disruption to Tesla’s Shanghai plant has been one of the highest profile consequences of China’s measures to control its biggest Covid-19 outbreak, which have also crimped consumption, including vehicle sales.

China’s auto association said last week it estimated auto sales in China dropped 48% in April as zero-Covid lockdowns shut factories, limited traffic to showrooms and put the brakes on spending.

Shanghai authorities have tightened a city-wide lockdown imposed more than a month ago on the commercial hub with a population of 25 million, a move that could extend curbs on movement through the month.