Exclusive: Tesla halts most production at Shanghai plant on Tuesday – memo

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Tesla China-made Model 3 vehicles are seen during a delivery event at the carmaker’s factory in Shanghai, China January 7, 2020. REUTERS/Aly Song

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  • Plant to produce less than 200 cars on Tuesday – memo
  • Plant halted work due to supplies issues – sources
  • China’s COVID policies pose challenges for manufacturers

SHANGHAI, May 10 (Reuters) – Tesla Inc (TSLA.O) has halted most of its production at its Shanghai plant due to problems securing parts for its electric vehicles, according to an internal memo seen by Reuters, the latest in a series of difficulties for the factory.

The plant plans to manufacture less than 200 vehicles on Tuesday, according to the memo, far less than the roughly 1,200 units it has been building each day since shortly after it reopened on April 19 following a 22-day closure.

Two sources familiar with the matter had earlier said supply issues had forced the factory to halt production on Monday.

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Shanghai is in its sixth week of an intensifying COVID-19 lockdown that has tested the ability of manufacturers to operate amid hard restrictions on the movement of people and materials.

Tesla had planned as late as last week to increase output to pre-lockdown levels by next week. read more

It was not immediately clear when the current supply issues can be resolved, said the people, who asked not to be identified because the production plans are private.

Tesla did not immediately respond to a query for comment.

China Passenger Car Association is scheduled to release April sales for Tesla, China’s second-largest EV maker behind BYD (002594.SZ), on Tuesday.

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

Aptiv (APTV.N), Tesla’s main supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla and General Motors Co (GM.N) after COVID-19 infections were found among its workers, two people familiar with the matter told Reuters on Monday.

Tesla’s Shanghai plant, also known as the Gigafactory 3, produces the Model 3 sedan and Model Y crossover for the China market and for export.

Tesla partially resumed production at the Shanghai plant on April 19 following a 22-day closure caused by the city’s COVID-19 lockdown.

Tesla had been aiming to increase output at its Shanghai plant to 2,600 cars a day from May 16, Reuters reported previously. read more

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.

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Reporting by Zhang Yan and Brenda Goh; Editing by Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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