Tesla abruptly halts car production at Chinese factory

Bloomberg | Updated on May 07, 2020

Tesla’s Model 3   -  REUTERS

Tesla Inc. suspended production at its plant on the outskirts of Shanghai, according to people familiar with the matter.

The company informed many factory workers, who were supposed to return to work Wednesday after Chinas five-day Labor Day break, to extend their holiday and return as soon as May 9, according to the the people, who asked not to be identified as the information was not public.

The reason for the abrupt halt wasnt immediately clear, but Chinese technology news site 36kr reported that it was because of component shortages. While Teslas only car factory outside the U.S. is seeing delays in receiving parts for its Model 3 in the future, its also facing problems with a crucial piece of manufacturing equipment thats being fixed, according to the people.

The production halt means that Tesla isnt making any cars worldwide because its other vehicle-assembly plant -- in Fremont, California -- has been idled because of the coronavirus. Thats made the Shanghai factory even more crucial for Tesla as the U.S. is weeks, if not months, behind China in reopening its economy.

Some employees are on site in the China plant for equipment inspection, maintenance and repair, the people said. The plant was temporarily idled earlier this year because of the coronavirus outbreak, but it was also among the first automakers to resume production, helped by aid from local authorities. That helped Tesla see a sales jump in March in China, while others struggled.

Tesla said in a statement that its Shanghai factory is conducting normal maintenance work and that the company made use of the Labor Day holidays to conduct production-line adjustments. The holidays were from May 1 to May 5.

Published on May 07, 2020

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