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Tesla Suspends Productions At Shanghai Plant Due To Supply Shortage

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Electric car maker Tesla Inc. (TSLA), has once again suspended most of its operations at its Shanghai factory due to components shortage, according to Reuters.

The production at the company's Shanghai plant was badly affected after city officials brought back strict Covid-19 restrictions in March, following the Coronavirus outbreak in China. Tesla had to shut down the plant following government orders. The plant reopened in April, with workers staying back in the factory in a "closed-loop system", encouraged by city authorities to curb the spread of COVID-19.

As per the Reuters report, an internal memo revealed that Tesla at first, planned to manufacture less than 200 electric vehicles on Tuesday, a big drop from the 1,200 per day the plant produced after it reopened in April. The company had hoped to raise production to 2,600 cars per day by mid-May, a target, which seems difficult now due to supply shortage.

While it is not clear which parts are missing, earlier reports have suggested that the closure of other factories in the city, including one that produces wire harnesses for Tesla, could be one of the reasons behind the supply issues.

Data accessed from the China Passenger Car Association (CPCA) shows that Tesla's sales in China have slid by 98 percent in April, with the company producing 10,757 vehicles and selling just 1,512. Tesla built 55,462 vehicles at its Shanghai factory in March and sold 65,814.

Last quarter, Tesla sold 310,000 cars, despite CEO Elon Musk calling it an "exceptionally difficult quarter" due to closures at its Shanghai plant, at the end of March and global supply chain issues.

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